Buoyed by the better-than-expected numbers for April-June, pharmaceutical major Cipla has raised its EBITDA margin target for the current fiscal to 23 percent. In the previous earnings call, the management of Cipla had guided for a margin target of 22 percent for FY24. "A good quarter gone by gives us the confidence to raise margin guidance," Umang Vohra, chief executive officer, Cipla said in an earnings call.
The company also reported its highest-ever quarterly sales in the US at $222 million, up 43 percent on year in Q1, driven by robust momentum in differentiated portfolio and beating expectations of a revenue moderation.
Going ahead as well, Vohra maintained a strong growth outlook for Cipla's US business as he expects a base quarterly run rate of around $210-215 million for US sales in the coming quarters.
Product launches
Moreover, the company also plans to launch 4-5 peptides and file a couple of other products in the next 18 months. Revenues from these launches in the US market will also be over and above the quarterly run-rate guided by Vohra.
Vohra's strong forecast for Cipla's US business was attributed not just to the contribution from the blockbuster drug Revlimid , but also to non-Revlimid sales. "Non-Revlimid revenue has also grown significantly either due to market share gains or drug shortages for certain products. Moreover, the market share loss for the Albuterol generic has also stabilised and we expect it to now grow in the coming quarters." Vohra said.
Also Read: Cipla Q1 net profit jumps 45.1% to Rs 996 crore, beats estimates
Coming to the India business, Cipla outperformed industry growth as its sales from the domestic market rose 12 percent on year in Q1. Further building confidence, Vohra also anticipates Cipla to continue to run above industry growth in the India prescription segment.
In addition, the company also provided some clarity on the much-awaited launch of the blockbuster drugs, Abraxane and Advair. Vohra informed stakeholders that the only roadblock coming in the way of the launch of these products is the site approval.
The company refrained from giving a clear timing with regards to receiving a classification for its Pithampur facility from the US Food and Drug Administration.
The original plan for the Pithampur site was to produce Advair and Abraxane. However, the site faced setbacks as it received eight observations from the USFDA, also delaying the launch of the two drugs along the way. It's worth noting that Advair is a respiratory drug, while Abraxane is used in chemotherapy treatments.
Giving further clarification on that, Vohra also informed that the transfer of Advair to another facility is underway. "The foreign facility is getting ready. IF Advair were to launch from the new site, then we will be looking at a FY25 launch," Vohra said.
Cipla had revealed plans to file the two key drugs from another foreign site, in case its Pithampur facility failed to clear US FDA inspections.
Lastly, the company also has robust capital expenditure plans worth around Rs 1,000-1,500 crore in FY24. Cipla also plans to use this capex in working towards sustainability, capacity expansion, and modernisation.
The company is also looking at inorganic growth opportunities in the US, India and South African markets.
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