Buy Cipla; target of Rs 1300: ICICI Securities

ICICI Securities research report on Cipla

Cipla’s Q1FY24 performance was a beat on all fronts, driven primarily by swift uptick in the core markets of India (up 12%) and US (up ~9% QoQ). gRevlimid continues to be an important product in the US, though traction in Q1 was driven by volume growth in the base portfolio. Launch timeline of gAbraxane and gAdvair in FY25 remains unchanged, though gAdvair may be launched earlier if Indore facility status is not escalated to an ‘official action indicated’ (OAI). In India, MR addition in branded generics and strong position in trade generics and consumer health will likely drive 10% growth over FY23-FY25E for Cipla.

Outlook

Management has raised its FY24 margin guidance by 100bps to 23%. We raise our FY24E and FY25E EPS by 6.7% and 4.4% respectively. Maintain BUY while we raise the target price to INR 1,300, valuing the company at 23x FY25E earnings.