Cipla's April-June quarter profit is likely to fall 40.8 percent year-on-year to Rs 385.2 crore but sequentially may surge 376.3 percent, according to average of estimates of analysts polled by CNBC-TV18.
Profit growth will be impacted by base. In Q1FY16, it was up at Rs 651 crore against Rs 294 crore YoY. However, profit may recover on sequential basis.
Q1FY16 was a blow out quarter for Cipla due to supply of Nexium generic that contributed USD 70-75 million and margin had expanded to 27 percent against 20 percent YoY. Hence, exports may come off YoY due to the unfavorable base. Base impact will negate full quarter consolidation of Invagen acquisition. Invagen was consolidated for 25 days only in Q4.
Rest of the World Markets like Africa may remain sluggish contributing to lower exports in Q1, led by slower offtake, depreciation in currency. Hence, exports may fall 7.9 percent YoY.
Domestic business like other pharma companies may be impacted by price controls (National List of Essential Medicines) and disruptions due to ban on fixed dose combinations. Hence, domestic business may grow by around 11.5 percent YoY.
Revenue is expected to be flat at Rs 3,865.8 crore in the quarter ended June 2016 against Rs 3,852.8 crore in year-ago period but may go up 18.3 percent QoQ.
Operating profit is seen falling 37 percent YoY (up 200 percent QoQ) to Rs 656.7 crore and margin may shrink 1000 points YoY (up 1030 bps QoQ) to 17 percent. Margin may increase 120 basis points QoQ after adjusting Q1FY16 at 15.8 percent.
Margin in Q4FY16 fell due to rationalisation measures undertaken in Europe & emerging markets and higher R&D costs.
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