Cipla Q1 PAT seen up 21% to Rs 306 cr

Revenues are seen going up by 17% YoY to Rs 1,864 crore in the June quarter while QoQ revenues are likely to be flat.

Earnings before interest, tax, depreciation and amortisation (EBITDA) are expected to go up by 16% YoY and 7% QoQ to Rs 428 crore during the same quarter.

Analysts expect flat operating profit margin year-on-year, but it is likely to grow by 160 basis points quarter-on-quarter.

In the domestic business, Cipla is expected to record high teen sales. In the fourth quarter of FY12, domestic sales (which contribute 50% to total business) grew 16% (18.4% in Q3) due to strong growth in generics & respiratory segment while in the third quarter that rose by 18.4%.

Analysts expect currency depreciation & opportunities such as Lexapro in the US to drive export growth. In the Q4, 11% growth in exports (contributed 50% to the total business) was mainly due to commencement of Lexapro to Teva (approximately Rs 159 crore) and INR depreciation.

Margins are expected to expand due to favourable revenue mix / currency and improving capacity utilization at the Indore SEZ. In the previous quarter, margin stood at 21.4%.

Analysts expect weak technology fees, which have been sluggish. In Q4, it was down by 65% YoY and 28.5% QoQ to Rs 5.6 crore. For the financial year 2011-12, it fell 51% to Rs 31 crore.

Investors should watch out for timelines for EU inhalers, Lexapro momentum, Indore ramp-up and Dymista launch update.

In the domestic business, the company plans to launch 25-30 new products every year and is expected to grow by 15%.

Growth in exports will mainly be driven by ramp-up in Indore SEZ operations which will take 2-3 years to reach optimum levels.

Company is investing Rs 1200 crore over the next 2 years, out of which Rs 600 crore will be for API facilities.