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Last Updated : Nov 07, 2019 09:00 PM IST | Source: Moneycontrol.com

Cipla expects to end FY20 with gross margins of 65-66% led by new launches in second half

The EBITDA margins of Cipla stood at 20.7 percent and gross margins at 65.7 percent in Q2FY20.

 
 
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Drug maker Cipla, which had reported strong numbers in the second quarter, said it expects to end the financial year FY20 with gross margins in range of 65-66 percent and the earnings before interest, tax, depreciation and amortization (EBITDA) margins in the range of 18-20 percent.

The EBITDA margins of Cipla stood at 20.7 percent and gross margins at 65.7 percent in Q2FY20.

Speaking to Moneycontrol, Kedar Upadhye, Global CFO of Cipla said, the company will be focusing on 8-10 meaningful launches in US.

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Upadhye said the sales of its key product, a generic called Sensipar, has witnessed a price erosion in Q2 due to competition, however the company has maintained its market share.

Upadhye indicated that the further dip in the contribution from generic Sensipar will be offset by new limited-competition launches and strong traction in the recently launched generic Pregabalin and gradual traction of antibiotic Daptomycin injection.

Cipla reported sales of $135 million in the US, of which Sensipar accounted for $15-20 million, as analyst estimates.

Cipla also stated that the launch of asthma drug inhaler Albuterol is likely to be delayed by a quarter owing to the inclusion of a dose counter in the device by the innovator. Now, the filing of the generic Advair is expected in early part of calendar year 2020.

The Phase III trial readout and the subsequent filing for IV Tramadol, the approval for the generic Proventil, and a filing for the generic Advair are expected to be the key catalysts in FY21E.

The management guided for a 200 basis points improvement in the tax rate in FY21 as it opts for the new tax rates from FY21E. The company expect to incur tax outgo of 29-30 percent in FY20.

Cipla posted 25 percent year-on-year (yoy) jump in its consolidated net profit at Rs 471.35 crore for the second quarter that ended on September 30, 2019. The company revenues rose 10 percent YoY to Rs 4,396 crore in Q2FY20.

The growth in profit and revenue was aided by the recovery of Cipla's India business following the restructuring of the trade generics distribution and its strong US business.

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First Published on Nov 7, 2019 09:00 pm
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