Pharma major Cipla on Friday announced its unaudited consolidated financial results for the quarter ended June 30th, 2024. According to the company’s statement, reported 18.27 per cent year-on-year (Y-o-Y) rise in its net profit during the first quarter of 2024-25 (Q1FY25). The profit after tax (PAT) came in at Rs 1,177.64 crore in Q1FY25, beating analysts’ estimates.
Meanwhile, the company’s revenue from operations rose by 5.8 per cent Y-o-Y to Rs 6,624.86 crore, riding on the India and US performances. The drugmaker also reported the company reported 8.6 per cent increase in revenue, while PAT rose by 25.4 per cent.
India Branded Prescription Business grew at a healthy rate of 10% YoY. Overall One India growth was offset by softness in Trade Generics Business owing to distribution model change.
The North America reported an all-time high revenue at $ 250 Mn up by 13% YoY supported by traction in a differentiated portfolio. The company reported that the South Africa business’ momentum continues with revenue growth at 19% in local currency terms.
Moreover, R&D investments stand at INR 353 Cr or 5.3 % of sales, higher by 1% YoY driven by product filings and developmental efforts. The Indian Consumer Health division reported a Y-o-Y growth of 3 per cent, influenced by the high performance of the previous year. Key brands Nicotex, Omnigel, and Cipladine sealed their leadership positions within their respective market segments.
On plans of diversification into new therapeutic areas, Umang Vohra, MD and Global CEO, Cipla told Financial Express.com: “Yes we are diversifying…we’ve diversified into neurology, into epilepsy…got the Sanofi licensing with their portfolio. So yes, we are diversifying. We’ve identified two new areas over and above lung leadership, antimicrobial resistance and wellness obesity, and mental health. So we are looking at building our therapies in those areas as well.”
He also informed that the company is also exploring M&A deals.
“…we are always looking for acquisitions. But at the same time, we’re very conscious of what value we pay. So if you’re not gonna pay a high value, then it’s not something that if you’re not, if you’re not gonna pay a value there, we think we will be able to derive enough amount of cash flow and synergy. Then we don’t do that acquisition. But just as core areas, India is a very big core area for us to acquire brand businesses. We’d love to also buy some select capabilities in the United States, Branded Markets expansion in South Africa as well as some of the key Emerging Markets like Brazil, and course, Consumer Business. These are very core areas to our expansion thesis,” Vohra told Financial Express.com.
Cipla has a net cash balance of Rs 8,449 crore. According to Prathamesh Masdekar, Research Analyst, StoxBox, the company reported stellar performance across key markets.
“Cipla continues to report healthy numbers that further established core business strengths in India, North America, and South Africa. Overall, the One-India business is backed by strong performance across branded prescriptions, offset by trade generics. However, the Consumer health franchise posted moderate growth due to last year’s high base. Anchor & transitioned brands continue growing even though a tough summer impact sales. In the US business, Cipla continued to scale newer peaks by posting the highest-ever quarterly revenue yet again. Momentum in the differentiated portfolio and strong demand signals in the base business were key propellants of this growth. South African business extended its momentum, led by healthy performance across essential therapies like Respiratory, CNS and Anti-infectives,” Masdekar told Financial Express.com.
It achieved leadership in the pharma prescription market by consistently outpacing market growth for a few years, he said.
“We expect Cipla to work towards establishing a strong foundation for growth in upcoming quarters led by (1) Continuing leadership in chronic therapies in the branded prescription business in India, (2) Expanding differentiated pipeline in the US business and plans to launch peptide products in FY25, (3) Strong demand in South African private business and continue to maintain leadership position in pharma prescription market, and (4) Investing in future pipeline as well as focusing on regulatory issues at the Goa plant and long-term growth outlook, the research analyst told Financial Express.com.
