Accumulate Cipla; target of Rs 1680: Prabhudas Lilladher

Prabhudas Lilladher's research report on Cipla

CIPLA’s Q1FY25 EBITDA (Rs17.2bn; 25.6% OPM) was broadly in line with our estimates, aided by higher GMs (66.9%) and US sales. Despite delay in some key launches like gAdvair and gAbraxane, ramp-up in gRevlimid and gAlbuterol and new launches like gLanreotide aided US sales. We continue to remain positive on key segments growth including India & US given 1) strong traction in respiratory & other portfolios, 2) potential +10% growth in domestic formulations and 3) sustainability of current US revs. Our FY25E/26E EPS broadly remains unchanged. We expect 10% EPS CAGR over FY24-26E.

Outlook

At CMP, stock is trading 25x FY26E EPS. We maintain our ‘Accumulate’ with TP of Rs1,680/share. Any further FDA escalation to Indore unit and price erosion in key products in the US will be the main risk to our call.

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