Cipla Q4 results | Profit declines 12% YoY to Rs 362 crore; revenue rises to Rs 5,260 crore, misses estimates

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Cipla Ltd, one of India’s top pharmaceutical companies, on May 10 reported a consolidated profit after tax (PAT) of Rs 362 crore for the quarter ended March 2022, a decline of 12 percent from Rs 413 crore reported in the year-ago period. Sequentially, the decline in profit is more pronounced at 50 percent from the profit of Rs 729 crore achieved during the previous quarter.

Consolidated revenues for the Mumbai-based company stood at Rs 5,260 crore, up by 14 percent compared to Rs 4,606 crore reported in the corresponding quarter of the previous year. On a sequential basis, the revenues have dipped by 4 percent from Rs 5,479 crore.

The decline during the quarter was due to an increase in employee costs, other expenses and a rise in inventory.

For the full-year period, however, the profit for the company jumped 63 percent to Rs 2,517 crore as compared to Rs 1,547 crore recorded during the previous financial year.

The consolidated revenues for the current fiscal grew 27 percent to Rs 21,763 crore as compared to the revenues of Rs 17,132 crore registered a year ago.

“I am pleased to see the continued momentum across our key markets despite adverse seasonality impacting overall business mix,” said Umang Vohra, MD & Global CEO.

Business Performance

All the business divisions of the company registered healthy growth in revenues during the quarter and the year.

One India

The domestic business achieved a robust 21 percent growth across branded prescription, trade generics and consumer health over the last year.

“Our One-India business continued the double-digit trajectory during the quarter. We crossed the $1 billion milestone in our domestic branded prescription business driven by the sustained growth across our acute and chronic portfolio,” added Vohra.

SAGA – South Africa, Sub-Saharan Africa and Global Access

The region grew by a healthy 8 percent on year in USD terms. The private business in the region grew 17 percent on a YoY basis in ZAR (South African Rand) terms. However, the tender business had a muted quarter which was in line with expectations.

The company had a market share of 7.5 percent in the region and grew 12.3 percent on-year when the overall market of the region witnessed a growth of 8 percent.

North America

Its US core formulation business jumped 17 percent on year to $ 160 million. The company continues to focus on launches with limited competition.

“Our established respiratory franchise and contribution from peptide assets have strengthened our US run rate,” said Vohra. “Adjusting for COVID-linked and other one-time charges, our core operating profitability continues to be strong, underpinned by the strength of our business fundamentals.”

Vohra is excited about the upcoming complex launches in H2FY23 which will further strengthen the overall business and profitability trajectory.

International Markets & API

The emerging markets and Europe business grew at a healthy rate backed by strong direct-to-market capabilities, which however was partly negated by forex volatility and muted B2B demand in Europe.

The API business witnessed an on-year decline of 39 percent during the quarter and declined by 5 percent for the year because of higher Q4FY21 base due to stock-up by customers and one-time profit share on an API supply.

EBITDA and Margins

EBITDA (earnings before interest, tax, depreciation and amortization) for the quarter at Rs 763 crore was down by 4.2 percent on-year compared to the EBITDA of Rs 796 crore during the same period a year ago.

For the full year, EBITDA is higher by 6.4 percent from Rs 4,303 crore to Rs 4,578 crore. EBITDA for the quarter and full year include a one-time COVID inventory and other charges.

EBITDA margins for the quarter at 14.5 percent were hit to the extent of 279 bps compared to the same quarter last year. Full-year EBITDA margins at 21 percent declined 142 bps from last year. The margins were impacted due to the one-time charge, higher employee costs, other expenses and a rise in inventory.

The company managed to achieve the net margin of 6.9 percent for the quarter, declining by 209 bps from the last year quarter. For the full year, net margins are lower by 99 bps at 11.6 percent.

Dividend

The company has recommended a dividend of Rs 5 per equity share (face value of Rs 2 per equity share) for the year 2021‐22. The dividend, upon approval by the shareholders, will be paid to shareholders within 30 days from the date of the Annual General Meeting.

Cipla stock declined by Rs 12.15 on May 10 and closed the day at Rs 926.15 at the National Stock Exchange. The stock has been trading flat over the past one year with a marginal gain of 3 percent. It has lost 8.5 percent during the past one month.