Choice Equity Broking's report on Cipla
We expect CIPLA’s revenue growth momentum to sustain, led by new launches in GLP-1s and biosimilars in India and the US. However, higher R&D spend and negligible Revlimid revenues are likely to pressure EBITDA margin from H2FY26. The management has revised FY26E EBITDA margin guidance to 22.8–24.0% (from 23.5–24.5%), although we expect margin support from the Eli Lilly partnership, starting H2FY27E. Reflecting this, we reduce our EPS estimate by 4.7%/4.2% for FY26E/FY27E.
Outlook
We retain valuation at 20x FY27–28E average EPS, leading to a revised TP of INR 1,580 (vs. INR 1,620 earlier) and downgrade to REDUCE, given limited near-term triggers and moderating margin trajectory.
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