Cipla will announce its third quarter (October-December) earnings today. Analysts feel coming quarters of the company are expected to be challenging due to pricing policy in domestic market and increasing pressure on PAT due to ongoing business transition.
Two factors to watch for are launch of inhalers in Europe and improvement in profits of Cipla Medpro.
Earnings expectations Q3FY14 Y-o-Y -Revenue may grow 22 percent to Rs 2,526 crore versus Rs 2,070 crore-EBITDA is likely to rise 15 percent to Rs 567 crore versus Rs 493 crore-Operating profit margin may decline at 22.5 percent versus 23.8 percent-PAT may go up 6.1 percent to Rs 359.6 crore versus Rs 339 crore
However, analysts feel profit after tax may come in as low as Rs 300 crore during the quarter due to margin pressure.
Factors to watch out for
-Domestic growth is estimated at 13-15 percent versus the 11 percent Q-o-Q due to trade issues settling-Export growth is estimated at over 30-40 percent due to Cipla Medpro consolidation (In Q2 Cipla Medpro generates sales of USD 50 million which is 2.5 months of sales in export business_-Absence of new launches in the US and higher R&D spends and employee costs are expected to restrict margins-R&D is expected to be 4 percent to 4.5 percent of sales for FY14-Margin pressure is expected due to consolidation of Medpro and domestic pricing policy -PAT is expected to come off due to higher interest costs and lower other income
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
