Cipla share price jumped 8.8% to Rs 1,163 today after the pharmaceutical major’s consolidated net profit grew 45% on-year to Rs 996 crore in the quarter ended June 2023. Revenue from operations rose 18% to Rs 6,329 crore. Nuvama and Choice have recommended ‘Buy’ and ‘Add’ ratings on the stock, respectively and have increased their target prices owing to better-than-expected Q1 results. Cipla stock has jumped 14% in the last one month and 18% in the past one year.
Should you buy, sell or hold Cipla stock?
Nuvama: Buy – Target Price: Rs 1,265
“Despite limited period gRevlimid cash flow, Cipla has other growth drivers: i) India business growing steadily across channels; ii) albuterol, lanreotide, leuprolide in the US; iii) gAbraxane and gAdvair in the pipeline, wherein competition is likely to be limited; and iv) peptide, inhaler filings. Factoring in this, we are raising FY24/25E EPS by 4%/3%. We are also raising the target valuation to 27x (from 24x) due to its sticky revenue stream and easing sectoral headwinds. This along with rollover to Q1FY26E yields a target price of Rs 1,265 (Rs 1,110 earlier); ‘BUY’,” said analysts at Nuvama Institutional Equities.
Choice: Add – Target Price: Rs 1,211
“We understand that Cipla’s growth story for FY24-25 was premised on the: 1) Scaling up of its US formulations business across a complex portfolio and continued contribution from respiratory and peptide products on the back of new product launches; and 2) Margin expansion which will be driven by rising confidence across all geographies, 3) sustaining the performance of South Africa which is a high margin business. We improve our estimates for FY24-25 and expect Revenue/EBITDA/PAT CAGR of 10.8%/16.8%/23.1% during FY23-FY25E. We value the stock based on FY25E EPS (22x) to arrive at a target price of INR 1,211 and maintain our ADD rating.,” said analysts at Choice.