Accumulate Cipla; target of Rs 998: KR Choksey

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26 Aug, 2025 12:21

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KR Choksey's research report on Cipla

Cipla reported relatively slower growth (relative to Q3FY20 and Q3FY21) in revenue in Q3FY22 at 6.0% YoY (-0.8% QoQ) to INR 54.78 bn in Q3FY22 (vs. estimate of INR 55.22 bn). Gross Profit Margins (GPMs) fell by 55 bps YoY/41 bps QoQ to 60.9% in Q3FY22. This was due to rise in cost of raw materials and provisions related to COVID 19 products. EBITDA grew at a flat pace YoY (+0.4% QoQ) to INR 12.31 bn (vs. estimate of INR 11.62 bn) while EBITDA margins reduced by 135 bps YoY (+25 bps QoQ) to 22.5% in Q3FY22 due to increase in operating costs YoY while it reduced QoQ. Net profit margin (NPM) contracted by 118 bps YoY (+41 bps QoQ) to 13.3%. The company reported 2.6% YoY (+2.4% QoQ) decline in net profit to INR 7.29 bn (vs. estimate of INR 7.06 bn).

Outlook

We apply a reduced P/E multiple of 20.62x (earlier 24.5x) on FY24E EPS of INR 48.4 and arrive at the same target price (TP) of INR 998 per share; an upside potential of 7.5% from its CMP of INR 928. Accordingly, we maintain our “ACCUMULATE” rating on the shares of Cipla.

More Info

At 16:00 hrs Cipla was quoting at Rs 951.50, up Rs 6.30, or 0.67 percent.

It has touched an intraday high of Rs 958.35 and an intraday low of Rs 944.90.

It was trading with volumes of 54,947 shares, compared to its thirty day average of 84,787 shares, a decrease of -35.19 percent.

In the previous trading session, the share closed up 0.05 percent or Rs 0.45 at Rs 945.20.

The share touched its 52-week high Rs 1,005.00 and 52-week low Rs 738.25 on 29 September, 2021 and 19 March, 2021, respectively.

Currently, it is trading 5.32 percent below its 52-week high and 28.89 percent above its 52-week low.

Market capitalisation stands at Rs 76,768.06 crore.

 For all recommendations report, click here

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