Analyst Concall
Cipla says may achieve US sales target of $1 bln in FY27
This story was originally published at 19:26 IST on 30 October 2025
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--Cipla: May achieve $1 bln sales target in US in FY27
--Cipla: Expect more clarity on FY27 margin guidance in Oct-Dec
--CONTEXT: Cipla had guided FY26 research spend 6.0-6.5% of total sales
--Cipla: See FY26 research spend as percentage of sales 50 bps higher
--Cipla: Margin guidance for year revised partly on higher research spend
--Cipla: Full-year margin guidance revised partly on higher R&D spend
--Cipla: Seasonal headwinds may affect Jan-Mar sales, margins
--Cipla: Hope to launch tirzepatide in India very soon
--Cipla: See significant mkt in tier-II, III cities in India for tirzepatide
--Cipla: To source APIs from market for GLP-1 products for now
--Cipla: Focus on improving margins in South Africa Oct-Mar
--Cipla: Expect Lanreotide generic market share to increase in coming qtrs
--Cipla: Lanreotide generic has achieved 22% market share in US
--Cipla: Expect reinspection of Indore facility anytime this year
--Cipla: Revlimid to have very small contribution to US sales in Q3
--CONTEXT: Cipla management's comments in post-earnings call with analysts
--Cipla: GST rate cut transition caused brief disruption in India sales
By Narayana Krishna and Shakshi Jain
HYDERABAD/NEW DELHI - Cipla Ltd. expects to achieve the revenue target of $1 billion in the US in 2026-27 (Apr-Mar), but it depends on product approvals and timing of product launches, the company's management said in a conference call with analysts on Thursday. "Directionally, we are expecting to reach the $1 billion mark in FY27," it said. The company clocked sales of $934 million in the US in FY25.
Cipla's consolidated net profit for the September quarter grew 4% on year to INR 13.5 billion, lower than analysts' estimate of INR 13.9 billion. The growth in net profit was slowest in 13 quarters. The company's revenue for the quarter was up 7.6% on year at INR 75.9 billion, above analysts' average estimates of INR 74.25 billion.
Cipla reported a near 2% fall in sales in North America, mostly led by the US, to $233 million. To achieve the revenue target, the company hopes to launch three peptide-based products, including Liraglutide, in North America, in 2026. Cipla is also planning to launch a generic of Advair in the US in the March quarter. This drug is used to treat obstructive pulmonary disease. The company aims to launch four respiratory products in 2026, which would drive future growth.
Cipla said its generic hormone drug Lanreotide has achieved 22% market share in the US and it is expected to rise further, which will add to the US sales growth in the coming quarters. The company launched the drug in May 2024 but faced supply issues. After resolving the supply constraints, the company is again gaining momentum in the drug, which has estimated annual sales of $900 million.
MARGIN STRESS
Cipla is cautious about its earnings before interest, tax, depreciation, and amortisation margin guidance for FY26. Explaining the reasons for lowering the FY26 EBITDA margin guidance to 22.75-24.00% from 23.5-24.5% earlier, the management said higher spending on research and development is one of the factors that would affect the margins in the current year. The management said the margin guidance is not included in the European business plan.
The company expects a 50 basis point increase in its R&D spend to the total sales. Earlier, the company indicated its R&D spend for FY26 would be 6.0-6.5%. Other factors, like negligible contribution from the generic cancer drug Revlimid and increased operating expenditure because of several drug launches, could impact the overall margins. The company's EBITDA margin for the September quarter was 25%. Responding to questions on FY27 EBITDA margin guidance, the company said it will get more clarity on it in Oct-Dec.
YURPEAK LAUNCH
The management said the company will launch diabetic and obesity drug tirzepatide under the brand name Yurpeak as soon as possible. Last week, Cipla announced a partnership with Eli Lilly to launch tirzepatide in India. Eli Lilly has already launched the drug under its own brand Mounjaro. Cipla said the field force has been trained to market the product and it is all set for the launch.
The management said an extensive sales force is its key strength to drive sales of tirzepatide. The company expects strong demand from tier-II and tier-III cities for the drug. The company said once it gets the approval for semaglutide, it will evaluate the options to market the product.
"...important to understand is that the semaglutide will also be a large market. It will be a market that will be shared by many people. Whereas our version of Tezapatride is also a strong market and a product with strong science," the management said.
"And we believe that between us and Lilly (Eli Lilly), there will be enough muscle to take this product into the market and create the opportunity. So, when you look at those two contrasting aspects, the opportunity begins to look a little bit more attractive."
Going forward, when glucagon-like-peptide-1 or GLP-1 opportunities open up, the company will source the bulk drugs for this category from the third-party market sources, Cipla said.
INDIA GROWTH
The management said the company is working on reviving sales growth in India and aims to surpass the Indian Pharmaceutical Market-IPM annual growth rate, which was projected at 8-9%. For the September quarter, the company reported 7% growth in India sales.
The company expects robust sales in India during Oct-Dec led by seasonal sales for products such as respiratory and cardiac segments. However, the company expects seasonal headwinds in Jan-Mar that may affect the sales growth in India. In the September quarter, the company witnessed a brief disruption in sales due to a cut in Goods and Services Tax rates. The company is also working on improving the margins in South Africa, one of the key markets for Cipla.
Cipla said it expects re-inspection of its Indore facility any time this year or next. The plant has faced scrutiny from the US Food and Drug Administration, including a warning letter in November 2023 for various manufacturing lapses. A Class-II recall in March 2024 for a product with a short fill issue is also hanging on this plant.
On Thursday, shares of the company closed at INR 1,540.10 on the National Stock Exchange, down 2.6% from the previous close. End
US$1 = INR 88.69
Edited by Ashish Shirke
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