Why Cipla Is Jefferies' 'Top Pick' Among India Pharma Stocks
Shares of Cipla gained after Jefferies initiated coverage with a ‘buy’, while terming the company as “Top Pick in Indian Pharma”.
Shares of Cipla Ltd. gained after Jefferies initiated coverage on the drugmaker with a ‘buy’, terming it as the “top pick in Indian pharma”.
Cipla has U.S. filings of inhalers and peptide space, both are less chartered territories—this makes it the top pick in Indian pharma generics, with strong product launches on the horizon, according to the research firm’s Sept. 16 report.
Jefferies has set its target price for Cipla at Rs 1,223 apiece, implying a 16% potential upside from the current levels.
Jefferies said the pipeline is quite promising as during the first quarter of fiscal 2023, Cipla gave a hint on its key U.S. pipeline products that comprises five respiratory assets, two complex generics, and five peptide injectables, most of these are set for launch in coming years.
It revised Cipla’s U.S. sales estimates to $768 million for FY24 from earlier $736 million and Ebitda margin to 24.2% from 23.3%, factoring the growth from the key product launches in the next few quarters.
The report said there is still upside to the estimates due to differentiated launch pipeline. Jefferies values Cipla at 25x June FY24 EPS.
Key risks, according to the report, include lower number of product launches and slower India business growth.
Shares of Cipla gained as much as 2.2% to Rs 1,055.25 apiece as of 12:45 p.m. on the BSE, while the Sensex was down 1.13%.
Of the 43 analysts, 35 maintain a ‘buy’, five suggest a ‘hold’ and three recommend a ‘sell’, according to Bloomberg Data.