Buy Cipla; target of Rs 1730 Prabhudas Lilladher

Prabhudas Lilladher is bullish on Cipla has recommended buy rating on the stock with a target price of Rs 1730 in its research report dated November 28, 2024.

Broker Research

November 29, 2024 / 12:35 IST

Buy

26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on Cipla

We believe the recent classification of its Goa facility as VAI by USFDA, has paved the way for gAbraxane launch. Though Q3FY25 will see a dip in US sales, given gLanreotide supply issues, the domestic market will recover. Looking forward, FY26E and FY27E will see several high-value niche launches in the US along with the normalization of gLanreotide supply. Unlike some of its peers, which will see sharp decline in FY27E profitability vs FY26E given higher gRevlimid contribution, we see negligible decline in case of Cipla. Further, Cipla’s strong net cash position of $1bn provides flexibility to pursue strategic M&A opportunities. Cipla’s stock has corrected in the last few months (12% from its high). At CMP, the stock is trading at 23x FY27E EPS. Timely launch of critical high-value products in the US in FY26E/27E will be key.

Outlook

We upgrade the stock to ‘Buy’ from ‘Accumulate’ with revised TP of Rs1,730/share, valuing at 27x FY27E EPS. Our FY26E and FY27E EPS stand marginally increased by 2-3% as we factor in higher US sales.

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