Accumulate Cipla; target of Rs 1450: Prabhudas Lilladher

Moneycontrol • 4 days ago

Original source

Key Investment Pillars

  • Cipla's Q2FY27 revenue miss was due to lower Africa and EM sales, but domestic formulation growth was strong at 12% YoY, driven by respiratory, cardiology, and anti-diabetic segments.
  • The company's US business showed a QoQ increase of 6% to USD 172mn, with gVentolin maintaining a 22% share of the US gAlbuterol MDI market.
  • Management reiterated FY27E margin guidance at 18.5-20% and a USD1bn US sales run-rate, with a strong net cash position providing flexibility for strategic M&A opportunities.
  • The GLP-1 portfolio continues to grow, with Tirzepatide witnessing monthly growth of around 5-10%.

Thesis Validation Checklist

  • Timely launch of critical high-value products in the US in H2FY27E, such as gAdvair and gSymbicort.
  • Improvement in US sales run-rate towards the guided USD1bn.
  • Margin expansion towards the guided range of 18.5-20% in FY27E.
  • Growth in domestic formulation sales, driven by key therapies such as respiratory, cardiology, and anti-diabetic segments.
  • Progress in the GLP-1 portfolio, including Tirzepatide and Yurpeak.