The Cipla share price rallied 7.9% to an intra-day high of Rs 1,432.10 on the NSE despite a concerning quarterly performance.
However, the brokerage houses mostly have a positive recommendation for the stock, with one upgrading the rating and target price, while others have retained their rating.
JM Financial on Cipla
With the worst quarter likely behind Cipla and improving visibility on US product launches, earnings momentum could improve from H2 FY27. This led JM Financial to upgrade Cipla to a ‘Buy’ rating from ‘Add’. The brokerage house has raised the target price to Rs 1,546 from Rs 1,431, looking at an upside of 16.4%.
Cipla reported a weak Q4 FY26, but results were broadly in line with estimates as the impact of the absence of gRevlimid and the supply disruption of Lanreotide in the US was already known.
The US business fell 30% YoY (CC) to $155 million, while India and South Africa supported overall growth with 15% and 33% growth, respectively.
Overall, the company provided a positive outlook for FY27, expecting US sales of $1 billion and domestic growth ahead of IPM.
“We have built in 11% revenue, 11% EBITDA, and 18% adjusted net profit CAGR over FY26–28, led by steady ex-US growth and gradual US recovery by FY28. Despite conservative estimates versus management guidance, the stock is trading at 20.6x FY28E EPS, below -1 standard deviation,” said JM Financial.
Nomura on Cipla
Nomura maintained its Buy rating on the stock, with a target price of Rs 1,510, an upside of 17%.
The company’s management expects double-digit growth in India ahead of the broader market in India. The company expects the US quarterly revenue run-rate to rise from $150 million in Q4 FY26 to $250 million in Q4 FY27, driven by high-value launches in respiratory and peptide segments.
“The guidance doesn’t factor in the contribution from Lanreotide. This is higher than our estimates, as we have factored in $907 million in FY28. For FY27E, management expects EBITDA margins at 18.5-20.0% vs our estimate of 19.4%,” said Nomura.
Motilal Oswal on Cipla
Motilal Oswal Financial Services said that the company remains well-positioned to manufacture formulations at its US site and source devices from its partner. India is projected to witness double-digit YoY growth in revenue, which is likely to sustain in FY27 as well.
The brokerage house retained its Neutral call on the drugmaker, with a target price of Rs 1,380, implying an upside of mere 4%.
The YoY decline in North American sales intensified in Q4 FY26, supported by competition in g-Lenalidomide and the adverse regulatory impact on the off-take of lanreotide. This was offset, to some extent, by the Indian business, comprising Domestic Formulation (DF), trade generics, and consumer wellness, which reported a broad-based double-digit YoY growth during the quarter.
“We expect earnings to remain under check due to a reduction in contribution from g-lenalidomide and some gestation period for the accruing of upcoming niche launches,” said Motilal Oswal.
Cipla’s share price performance
The share price of Cipla has risen 4% in the last five trading sessions. The stock has given a return of 15% in the past one month and has dropped 7.6% in the last six months. Cipla’s stock price has declined by over 5% in the previous one year.
Cipla Q4 FY26 results
The company’s consolidated net profit tumbled 55% year-on-year (YoY) to Rs 554.6 crore in the fourth quarter of FY26. Its revenue from operations fell 2.8% YoY to Rs 6,541.2 crore for the reporting quarter, while total expenses surged 8.5% to Rs 5,982.3 crore.
On the operating front, the company’s earnings before interest, tax, depreciation and amortisation (EBITDA) came in at Rs 997 crore, sharply dropping from Rs 1,538 crore a year back, while EBITDA margins narrowed to 15.2% from 22.8% in the corresponding quarter a year back.
Also, the company has proposed a final dividend of Rs 13 per equity share for FY26.
Disclaimer: This article provides factual analysis only and is not, and should not be construed as, an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a SEBI-registered financial advisor.