KR Choksey's research report on Cipla
The Q1FY25 performance was slightly below estimates with Cipla’s sales/Gross Profits/EBITDA and PAT for Q1FY25 deviating by -3.2%/-1.6%/-3.2%/-2.3% from our estimates. It was due to weaker than expected performance in SAGA and API partially offset by marginally higher than estimated, US (+3.2%) and Emerging Markets (+3.8%). We cut down our earning estimates by 10% and 7% for FY25E and FY26E, respectively.
Outlook
We increase the PE multiple to 27.0x (earlier 25.0x) applying on FY26E EPS of INR 60.6 (earlier INR 65.3) to account for likelihood of strong product launches in H2FY25E and FY26E in the US market. As such, we maintain the TP of INR 1,633; however, downgrade CIPLA’s rating to ACCUMULATE from BUY as the upside is at 6.8% from CMP.
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