Buy Cipla; target of Rs 1830: Motilal Oswal

Motilal Oswal's research report on Cipla

Cipla delivered in-line 1QFY25 performance. It continued to track well in the US generics segment, with sales scaling an all-time quarterly high of USD250m. However, the benefit was partly offset by a temporary disruption in the trade generics segment. Cipla continues to outperform the industry in chronic therapies within the branded prescription segment. Cipla is building a niche product pipeline in the peptides/inhaler space within the US generics segment. With a change in its distribution model, the trade generics business is also back on the growth path. The EBITDA trend continues to be better in the consumer health segment. Accordingly, we estimate 12% earnings CAGR over FY24-26. Reiterate BUY.

Outlook

We maintain our earnings estimates for FY25/FY26. We value Cipla at 25x 12M forward earnings to arrive at our TP of INR1,830.