Cipla shares surge 7% post Q3; hit fresh all-time high

Shares of Cipla witnessed strong buying on Tuesday, with the pharma heavyweight rallying over 7% to hit a fresh all-time high in opening trade as investors cheered its December quarter earnings. The Mumbai-headquartered company has reported better-than-expected earnings in Q3 FY24, driven by strong growth in the top and bottom lines.

Buoyed by robust Q3, shares of Cipla opened higher at ₹1,395.95, up 6.3% against the previous closing price of ₹1,312.60 on the BSE. In the early trade, the pharma stock rose as much as 7.3% to scale a new peak of ₹1,408.55, while the market capitalisation climbed to ₹1.12 lakh crore. The counter has surged 65% against its 52-week low of 852 touched on March 22, 2023.

On January 22, Cipla released its earnings report which showed that its consolidated net profit rose 32.25% to ₹1,068.4 crore in the quarter ending December 2023, compared with ₹807.8 crore in the third same period of the previous fiscal year. Consolidated revenue from operations grew 13.66% to ₹6,603.81 crore as against ₹5,810.09 crore in the corresponding period a year ago. On the operating front, EBITDA rose 24% to Rs 1,748 crore, while the margin stood at 26.46%.

During the quarter under review, its total expenses jumped 8.78% to ₹5,119.81 crore as against ₹4,706.47 crore in the October-December quarter last fiscal.

“Our topline growth for the quarter was at an impressive 14% YoY with strong EBITDA margins at 26.3%. One India business grew at a healthy 12% YoY backed by strong performance across Branded Prescription, Trade Generics and Consumer Health,” says Umang Vohra MD and Global CEO, Cipla.

As per the company, India's business reported revenue growth of 12% YoY supported by growth across branded prescription, trade generics and consumer health. In the global market, North America registered its highest ever revenue at $230 million at 18% YoY growth, supported by continuing momentum in key assets and robust demand in base business along with some year-end buying.

Meanwhile, South Africa continued its growth journey, by posting a solid 15% YoY increase in revenue in local currency terms, aided by positive traction in prescription, OTC and tender.

The company invested ₹400 crore, or 6.1 % of sales, on R&D in Q3 FY24, higher by 10% YoY driven by product filings and developmental efforts.

“Our focus continues on expansion in chronic therapies, growing big brands, global wellness as well as developing our R&D pipeline in respiratory and peptides. We will continue to focus on driving profitable growth across businesses,” says Cipla CEO.

Cipla’s balance sheet continues to remain robust with a net cash position of ₹7,143 crore as on December 2023, while debt declined to ₹449 crore from ₹961 crore in Q2 FY24 and 803 crore at the end of March 2023.

(DISCLAIMER: The views and opinions expressed by investment experts on fortuneindia.com are either their own or of their organisations, but not necessarily that of fortuneindia.com and its editorial team. Readers are advised to consult certified experts before taking investment decisions.)