Hold Cipla; target of Rs 530: ICICI Direct

ICICI Direct's research report on Cipla

Revenues grew a mere 3.2% YoY to | 3698 crore (I-direct estimate: | 3878 crore), as 13% YoY growth in India at | 1353 crore (I-direct estimate: | 1341 crore) was largely offset by 17% YoY decline in RoW to | 676 crore (I-direct estimate: | 797 crore) and 24.9% YoY decline in EU to | 135 crore (I-direct estimate: | 176 crore) EBITDA margins improved 94 bps YoY to 15.1% but came in lower than I-direct estimate of 18.5% mainly due one-offs.

Outlook

This augurs well in the current scenario. Hence, it will continue to command a higher multiple vis-à-vis peers. We arrive at our target price of | 530 based on 20x FY20E EPS of | 26.4.