Pharma major Cipla‘s profit is all set to increase due to its robust growth in the complex respiratory portfolio, a report from brokerage firm Sharekhan revealed.
According to the report, the company’s strategic focus on complex products and the resultant impact on margins will contribute to the company’s upward trajectory. The report also highlighted a ‘Buy’ call for Cipla, accompanied by a higher Price Target (PT), citing several positive indicators in the company’s performance.
Some of the positive indicators include significant buoyancy in the US market, where price erosion pressures are easing, volume growth due to drug shortages, and a concentrated effort on complex products.
The also revealed that Cipla’s recent growth figures highlight its strong position in the market. In February this year, the company recorded 8.1 percent growth in the Indian Pharmaceutical Market (IPM), outpacing the overall IPM growth of 6.7%.
On a Moving Annual Total (MAT) basis, Cipla’s growth stood at 9.9 percent, further reflecting its sustained momentum. According to Sharekhan, a significant increase in Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) margins, projecting a climb to 26% by FY26E is anticipated.
The brokerage firm is attributing this positive outlook to several strategic initiatives by Cipla, including an increased share in chronic products domestically, new launches of complex generics in the US market, and the finalization of the Actor Pharma acquisition in South Africa.
According to a report by Business Today, the pharma major’s success in the US market is highlighted as a major driver of its growth momentum.
The company’s sales in the US continue to thrive, propelled by new product launches, seasonal factors, and a strong market position in key assets such as Albuterol, Brovana, and Lanreotide. Particularly, the easing of price erosion pressure in the base portfolio further contributes to Cipla’s robust performance in the US, the report further said.
Meanwhile, the company’s India business has reported substantial traction, with a 60 percent contribution from the Chronics portfolio. The reported also highlighted that the company’s strategic focus on expanding its flagship brands and its success in key therapeutic segments position Cipla as a frontrunner in the Indian pharmaceutical landscape
The report by Sharekhan also pointed out Cipla’s potential for further profitability and market leadership. This makes it an attractive investment opportunity in the pharmaceutical sector, the firm said.
