Pharmaceutical major Cipla Limited is expected to report modest growth in earnings when it shares its numbers for the September quarter on November 4 because of a high base in the year-ago period.
In the year-ago quarter, Cipla benefitted from a surge in sales of COVID-19 -related drugs as infections spiked in the country following the spread of a new variant of the coronavirus.
The Mumbai-based company is expected to report a 9 percent year-on-year rise in consolidated net profit at Rs 771.3 crore, according to an average of estimates from five brokerage firms polled by Moneycontrol.
Its topline growth is also expected to be insipid as consolidated revenues are pegged to grow 3.7 percent on-year to Rs 5,723.9 crore, given the high base of the year-ago quarter.
In India, sales are likely to be up 5-7 percent, driven by higher sales of acute diseases treatment products. The moderate rate of growth is down to the higher share of COVID-19 treatment-linked drugs in the year-ago quarter.
The US business is likely to be the star of the quarter, with analysts expecting more than 20 percent year-on-year growth in revenues to $170 million led by strong sales of generic Revlimid and other limited-competition products.
The South African business is likely to report a drop de-growth in sales due to the sharp depreciation in the South African rand against the US dollar during the quarter.
The operating performance will be lacklustre, with consolidated operating profit likely to remain flat on a year-on-year basis at Rs 1,235.7 crore. The consolidated operating margin in the quarter is also seen stable at 22.2 percent .
“We continue to maintain that the company's FY2023 EBITDA margin guidance of 21-22 percent is conservative,” Kotak Institutional Equities said in a preview note.
On November 3, shares of Cipla ended 0.3 percent higher at Rs 1,163.10 on the National Stock Exchange.
(Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.)
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