Buy Cipla; target of Rs 730: Firstcall Research

Firstcall Research's report on Cipla

Cipla Ltd is an extensive range of pharmaceutical and personal care products have brought health and happiness to millions of people the world over – combining technology and quality with affordability, The company presence in over 150 countries, portfolio includes 1500 products in various therapeutic categories with one quality standard globally. Reported its financial results for the quarter ended 31st March, 2015.

The company’s Revenue for the 4th quarter of FY15 rose by 18.10% to Rs. 27014.60 million from Rs. 22873.90 million, when compared with the prior year period. Net profit stood at Rs. 2139.00 million against Rs. 2766.40 million in the corresponding quarter ending of previous year. Reported earnings per share of the company stood at Rs. 2.66 a share during the quarter compared to Rs. 3.45 over previous year period. In Q4 FY15, Profit before interest, depreciation and tax is Rs. 4339.60 million as against Rs. 4518.30 million in the corresponding period of the previous year.

OUTLOOK AND CONCLUSION

At the current market price of Rs.641.00, the stock P/E ratio is at 42.11 x FY16E and 39.32 x FY17E respectively.

Earning per share (EPS) of the company for the earnings for FY16E and FY17E is seen at Rs.15.22 and Rs.16.30 respectively.

Net Sales of the company is expected to grow at a CAGR of 10% over 2014 to 2017E.

On the basis of EV/EBITDA, the stock trades at 23.95 x for FY16E and 22.45 x for FY17E.

Price to Book Value of the stock is expected to be at 4.17 x and 3.76 x respectively for FY16E and FY17E.

"We recommend ‘BUY’ in this particular scrip with a target price of Rs 730 for Medium to Long term investment", says Firstcall Research Report.

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