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Informist, Thursday, Oct. 23, 2025

 

By Narayana Krishna

 

HYDERABAD - Despite market share erosion and pricing pressure in the US, Cipla Ltd. is expected to report high single-digit growth in its September quarter earnings aided by better performance in India and other countries, according to analysts.

 

While the US generic sales are likely to see a decline due to a fall in sales of cancer drug generic Revlimid, its impact may be offset by growth in sales of other drugs such as hormones treatment drug Lanreotide and asthma drug Albuterol. On the domestic front, there may be a partial impact of the recent goods and service tax cut, but Cipla is likely to report growth led by its respiratory and consumer health segments, according to analysts.

 

The company is expected to report a consolidated net profit of INR 13.97 billion for the September quarter, up 7% on year and 8% on quarter, according to an average of estimates from eight brokerages. Analysts' estimates for Cipla's September quarter net profit range from a low of INR 13.10 billion by Motilal Oswal Financial Services Ltd. to a high of INR 14.94 billion by JM Financial Institutional Securities Pvt. Ltd.

 

Cipla's revenue for the latest quarter is seen up 6% on year and 7% on quarter to INR 74.62 billion, according to the estimates. Revenue projections range from a high of INR 76.22 billion by Emkay Global Financial Services Ltd. to a low of INR 73.01 billion by JM Financial.

 

Mumbai-headquartered Cipla is known for its respiratory and anti-viral drugs in both domestic and international markets. India accounts for nearly 43% of the company's consolidated revenues, while the contribution from North America is around 30% to the overall sales. South Africa, Asia, and emerging markets, together classified as the SAGA region, account for nearly 12% of the total sales, while other markets account for around 15%. Cipla sells its pharmaceutical products in 80 countries. 

 

Cipla classified its India businesses as "One India" for its prescription, trade generics, consumer health, and institutional segments under one reporting category, to improve coordination and efficiency. "One Africa" combines its South African unit, Cipla Medpro, with other African markets to operate as one integrated business and drive growth across the region. Cipla is scheduled to announce its Jul-Sept earnings on Oct. 30.

 

KEY MARKETS

Cipla is likely to report weak numbers in the US for the latest quarter, but will likely report earnings growth for India, Africa and other regions, according to analysts.

 

Motilal Oswal expects Cipla to report $209 million revenue in the US for the September quarter, down 12% on year, due to lower Revlimid sales and limited number of product approvals. In India, the company is expected to report 9% sales growth for the quarter, Motilal Oswal said.

 

According to Kotak's estimates, Cipla's US sales for the quarter are seen declining 3% on quarter to $220 million. The company is expected to report 9% sales growth in One Africa, and 10% growth in Europe and the rest of its markets together.

 

Nirmal Bang projects Cipla to report a revenue growth of 5.4% on year, driven by 8% growth in the domestic business on the back of a favourable season and a low base last year. The US business is expected to grow 4% and remain flat on year, led by Lanreotide injection and Albuterol. Decline in the base business and Revlimid price erosion is expected to have a negative impact on the overall US sales growth for the quarter. Prabhudas Lilladher Pvt. Ltd. expects the company's US sales at $230 million, while domestic sales may grow 8%.

 

MARGIN PRESSURE

Higher spending on research and development along with increased operational expenditure is likely to drag down Cipla's operating margin in the September quarter, according to analysts. Increased competition and price erosion in high margin drug Revlimid are likely to have an impact on the overall margins for the quarter.

 

Kotak expects Cipla's September quarter gross margins to decline 130 basis points quarter-on-quarter to 67.5% and the overall earnings before interest, tax, depreciation and amortisation to decline 4% on year to INR 18 billion. The EBITDA margin is expected to fall 230 bps on year to 24.4% in Jul-Sept. Motilal Oswal expects Cipla's EBITDA margin at 24.9% and Nuvama Wealth projects it at 25.8%. The company's EBITDA margin for Jul-Sept last year was at 26.7%.

 

Nirmal Bang projects Cipla's September quarter EBITDA margin at 26%, a decline of 70 bps, mainly due to an increase in research and development spending and other operating expenses. According to the average of estimates from eight brokerages, Cipla's Jul-Sept EBITDA is pegged at INR 19.5 billion. The EBITDA estimates range from INR 18.02 billion to INR 21.22 billion.

 

Analysts will look for an update on the company's plans to expand its orthopaedic segment portfolio. The progress of launch plans of combination drugs in respiratory therapy in India is also another point of interest for market participants.

 

Of the 19 research reports available on the company with Informist, 13 brokerages have a 'buy' or equivalent rating on the stock with an average target price of INR 1,729, while three have a 'hold' rating on the stock with a target price of INR 1,590 and three have a 'sell' rating with a price target of INR 1,428 per share.

 

The stock has risen nearly 7.5% since the announcement of its June quarter earnings on Jul. 25. On Thursday, the company's shares ended over 1% lower at INR 1,645.10 on the National Stock Exchange.

 

Following are the Jul-Sept earnings estimates for Cipla Ltd. from eight brokerage firms in descending order by the estimate of net profit:

 

Brokerage name	Net Sales	Net Profit	EBITDA
	--in INR million --
JM Financial Institutional Securities Pvt. Ltd.	73,005	14,942	19,305
Emkay Global Financial Services Ltd.	76,224	14,821	21,224
Prabhudas Lilladher Pvt. Ltd.	75,064	14,576	20,102
ICICI Securities Ltd.	75,911	14,098	20,041
Nuvama Wealth Management Ltd.	75,230	13,630	19,392
Nirmal Bang Equities Pvt. Ltd.	74,339	13,386	19,324
Kotak Institutional Equities	73,866	13,247	18,019
Motilal Oswal Financial Services Ltd.	73,324	13,098	18,258
Average	74,620	13,974	19,458

 

 End

 

US$1 = INR 87.84

 

Edited by Tanima Banerjee

 

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