Indian pharmaceutical major, Cipla Limited, declared its results for the second quarter ending September 30, 2021 (Q2FY22) on October 26. The company posted a consolidated profit after tax (PAT) of Rs 711 crore for the quarter, increasing by 7 percent from Rs 644 crore reported in the same quarter last year. It had reported a profit of Rs. 888.34 crore in the June'21 quarter.
Consolidated revenue came in higher by 10 percent at Rs 5,520 crore, compared to Rs 5,038 crore logged in September 2020 quarter. Revenues in Q1FY22 stood at Rs 5,504 crore.
Revenues were aided by brisk business in the domestic and US formulations space for the company as well as in other parts of the world.
Commenting on the performance of the company, Umang Vohra, MD and Global CEO, said, “I am pleased to see the strong momentum in core therapies across our branded markets and sustained cost control leading to 10 percent revenue growth and 22.2 percent EBITDA margin for the quarter, offsetting price erosion and normalizing COVID contribution”.
Business Performance
Overall India business for the company in rupee terms grew by 16 percent on an annualised basis on a high base of last year. It generated revenues of Rs 2,416 crore in this quarter as against Rs 2,090 crore generated in the previous year. On a sequential basis, there was a drop of 11 percent from Rs 2,710 crore reported in the previous quarter.
Growth in India business was backed by strong performance in branded subscription business which was driven by sustained volume traction across therapies in core portfolio. Contribution from COVID portfolio normalised as per expectations during the quarter.
Robust volumes were witnessed in trade generic business as well as consumer health business in India.
The company announced a strategic partnership with Eli Lilly for Diabetic products. It has a market share of 23.1 percent in Respiratory Therapy in India, 14.6 percent in Urology, 7.8 percent in overall chronic therapy, 7.5 percent in Anti-infective, and 5.3 percent in Cardiac related therapies.
“Our collaboration with Eli Lily for their diabetes products helps us further strengthen our endeavour of creating access to innovative medicines in-line with the One-India strategy”, Vohra commented.
SAGA (South African, Sub-Saharan Africa and Global Access) business grew 8 percent in US dollar terms on a yearly basis. Here the major contribution came from South Africa private business where strong growth was witnessed in CNS, respiratory and anti-infective therapies.
SAGA contributed Rs 994 crore in this quarter as against Rs 923 crore last year. It grew 19 percent on a quarterly basis from Rs 837 crore in the previous quarter.
South Africa's private business for the company grew by 8.7 percent and it enjoys a market share of 7.3 percent while the over-the-counter (OTC) business grew by 8.0 percent where it enjoys a 6.8 percent share of the market.
The US contributed $142 million to the total revenues of the company where the growth in core products negated the price erosion in the rest of the product portfolio. Its core products Albuterol and Arformoterol enjoy 18 percent and 39 percent of the generic market share in the US.
In rupee terms, North America generated Rs 1,055 crore of revenues as against Rs 1,035 crore last year and Rs 1,038 crore in the previous quarter, which is a growth of 2 percent.
As much as 14 percent yearly growth was witnessed in emerging markets in US dollar terms on the back of resumption of supplies to middle-eastern markets and contribution from COVID-related products. It earned Rs 821 crore of revenues as against Rs 722 crore last year. Growth on a sequential basis was much higher at 41 percent from Rs 582 crore.
APIs and others contributed Rs 234 crore to the topline of the company.
Margins
Earnings before interest, depreciation, tax, and amortisation (EBITDA) came in at Rs 1,226 crore which is higher by 4 percent from Rs 1,177 crore reported last year. It declined by 9 percent on a sequential basis from Rs 1,346 crore in the previous quarter.
However, EBITDA margins declined by 114 bps to 22.2 percent from 23.4 percent last year. The decline was bigger on a sequential basis at 224 bps from 24.5 percent clocked in the previous quarter.
Higher other income during the quarter helped curtail the decline in net margins which dropped by 32 bps from 13.2 percent last year to 12.9 percent in this quarter. A 10 bps decline was witnessed on a sequential basis.
The stock closed at Rs 907.5 today, up Rs 5.65 from its previous day’s close of Rs 901.85.
It has generated 21 percent returns over the past one year and 10 percent during this financial year. However, the stock is down 5 percent over the past 3 months and 7 percent in the past 1 month.
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