Neutral Cipla; target of Rs 1130: Motilal Oswal

Motilal Oswal recommended Neutral rating on Cipla with a target price of Rs 1130 in its research report dated July 26, 2023.

Broker Research

July 30, 2023 / 11:13 IST

neutral

Motilal Oswal's research report on Cipla

Cipla delivered better-than-expected 1QFY24 performance, led by superior executions in North America (NA) and domestic formulation (DF) segments. Cipla is on track to build a complex product pipeline in the peptide space, and reduce compliance risk by incorporating alternate manufacturing sites. We raise our earnings estimates by 6% each for FY24/FY25 to factor in: a) reduced competition in the US generics segment, b) better visibility for niche launches in NA, and c) better operating leverage.

Outlook

We value Cipla at 22x 12M forward earnings and add NPV of INR30 related to g-Revlimid to arrive at our TP of INR1,130. There has been a healthy revival in outlook for NA markets in addition to betterthan-industry performance in the branded generics segment (DF/South Africa). However, we reiterate our Neutral rating on limited upside from current levels.

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