Cipla Q3 Results: Profit rises 10% YoY to Rs 801 crore but misses estimates; stock hits 4-month low

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Cipla on Wednesday reported a 10% year-on-year (YoY) rise in consolidated net profit for the quarter ended December 2022 to Rs 801 crore, but this was lower than the ET Now poll estimate of Rs 880 crore.

Consolidated revenue from operations grew a meagre 6% on year to Rs 5,810 crore. It also missed analysts’ estimate of Rs 6,100 crore.

Operating profit, calculated as earnings before interest, taxes, depreciation and amortization (EBITDA) grew 14.3% on year to Rs 1,407.56 crore, while the margin expanded by 176 basis points to 24.23%.

A sharp fall in input costs contributed to the improvement in operational performance. Raw material costs dropped by 15% on year to Rs 1,299.04 crore.

Higher finance cost and a rise in the tax outgo weighed on the bottomline. The net tax outgo for the quarter was Rs 410 crore compared to Rs 295.2 crore a year ago.

Cipla’s standalone net profit for the quarter fell 7.2% on year to Rs 678.52 crore, while revenue grew a marginal 0.4% to Rs 3,899.45 crore.

spent Rs 363 crore towards research and development in the reported quarter or 6.2% of its sales. This is 39% higher on a YoY basis, driven by the ongoing clinical trials on a respiratory asset and other developmental efforts continuing including biosimilars. “Our reported operating profitability of 24.2% reflects our focused efforts on navigating external headwinds and continued higher R&D spends stemming from ongoing respiratory trials and initiation of biosimilar programs,” said Umang Vohra, MD and Global CEO of the drugmaker.

The One-India business saw robust double-digit growth in core portfolio across therapies and business segments. Excluding the COVID portfolio, growth was 11% YoY. In the branded prescription business, Cipla for the 7th consecutive quarter, saw market-beating growth in core portfolio adjusted for COVID products.

There was sustained momentum across respiratory, cardiac, and anti-diabetic drugs in the core portfolio. Cipla saw healthy market share across chronic therapies in the quarter.

In South Africa, Cipla clocked a 9.3% growth in the prescription drug portfolio against the market growth of 3.7%. The overall growth in South Africa was 8,5% compared with market growth of 2.3%.

India remains the mainstay business for Cipla, as the region contributed 44% to the consolidated revenue, followed by North America at 28%.

The total debt as on December 31, stood at Rs 1,042 crore, compared with Rs 1,068 crore a quarter ago.

The dismal numbers from the drugmaker weighed on the stock, which extended the day’s losses and hit an over 4-month low of Rs 1,021. The shares were trading 3.2% lower on the National Stock Exchange at Rs 1,028.45.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)



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