Cipla Q3 Results: Profit Falls 3% But Beats Estimates
The Mumbai-based drugmaker's net profit fell 3% year-on-year to Rs 728.6 crore in the quarter ended December.
Cipla Ltd.'s quarterly profit fell but beat estimates.
The Mumbai-based drugmaker's net profit fell 3% year-on-year to Rs 728.6 crore in the quarter ended December, according to its exchange filing. That compares with the Rs 707.3-crore profit estimate of analysts tracked by Bloomberg.
Highlights (YoY)
Revenue rose 6% to Rs 5,478.9 crore. Analysts pegged the metric at Rs 5,443.5 crore.
Ebidta was flat at Rs 1,231 crore against the estimated Rs 1,163.7 crore.
Ebitda margin stood at 22.5% against 23.8%. The estimate was 21.4%.
"We're well placed to close the year in-line with our guidance of 22%," Umang Vohra, managing director and global chief operating officer of Cipla, was quoted as saying in a statement accompanying the earnings.
He also said their portfolio execution in branded markets of India and South Africa and strong respiratory traction driving U.S. generic franchise to a multi-quarter high quarter were key drivers.
"The unlocking of our first 505(b)(2) peptide asset, lanreotide injection (used to treat people with too much growth hormone) is an important step in strengthening our complex generics engine, inching up our U.S. footprint."
Other Highlights (YoY)
India sales rose 13% to Rs 2,518 crore, contributing 46% to total sales. This was led by a sustained momentum across core therapies and traction in flagship brands; modest contribution from covid portfolio.
The company ranked second in terms of market share in overall chronic therapies in India and first in respiratory and urology, according to IQVIA MAT data for December 2021.
U.S. business grew 9% to Rs 1,124 crore, comprising 21% of total revenue.
Overall South Africa, or SAGA, region business, excluding animal health business, contracted 2% while business in other international markets, which includes emerging markets and Europe, fell 0.3%.
SAGA contributed to 16% of the total revenue for the quarter while international markets made up 13%.
Bulk drugs business, which makes up 3% of total revenue, fell by 26% over the preceding quarter. The company attributed this to momentary slowdown in orders from developed markets, as per the press release.
The company was net cash positive as on Dec. 31.
Separately, the board has also approved some restructuring to simplify its group structure in its meeting held on Jan. 25:
Transfer of the India-based U.S. business undertaking to the company's wholly-owned subsidiary, Cipla BioTec Ltd., for Rs 1,400 crore.
The turnover of this entity is 16.6% of Cipla's total turnover.
This transfer is being done to simplify group structure and subsidiarise the company's India-based U.S. business to help improve focus, the filing said.
Transfer of its consumer business undertaking to another wholly owned subsidiary, Cipla Health Ltd., for a consideration of Rs 80 crore.
The turnover of this entity is 2.09% of Cipla's total turnover.
The transfer is being done consolidate consumer business as part of OneIndia strategy.
The effective date for the first transfer is June 30, while that of the second is March 31, 2022.
Both transfers will be on a going concern, slump sale basis through a business transfer agreement, the filing said.
Shares of Cipla closed 1.4% higher on Jan. 25 ahead of the earnings announcement against the S&P BSE Sensex's 0.6% rise.