Cipla Q3 Results: Profit Rises, But Misses Estimates
The drug maker's net profit rose to Rs 801 crore year-on-year.
Cipla Ltd.'s third-quarter profit rose but missed estimates.
The Mumbai-based drug maker's net profit rose 10% year-on-year to Rs 801 crore in the quarter ended December, according to its exchange filing. That compares with the Rs 920-crore consensus estimate of analysts tracked by Bloomberg.
Sequentially, the profits rose 2%.
Excluding one-time tax charge on account of deferred tax asset reversal, the after-tax profit stood was Rs 876 crore, said the company in the filing.
Cipla Q3 FY23 Highlights (YoY)
Revenue rose 6% to Rs 5,810 crore against an estimated Rs 6,172 crore. Ex-covid, it grew 11%, said the company in the filing.
Ebitda was up 12% to Rs 1,408 crore as compared to the Rs 1,473-crore forecast.
Ebitda margin stood at 24.2% against 22.9%. Analysts had estimated it at 23.9%.
One India franchise delivered strong performance across therapies and segments with double digit market beating growth in prescription on a covid adjusted base, said Umang Vohra, managing director and global chief executive officer at Cipla in the filing.
"We achieved the highest ever quarterly revenue for the North America region of $195 million driven by the contribution of differentiated products and market share expansion in flagship respiratory and peptide franchises."
In the post-earnings call, he added that the uptick in U.S. sales was due to a strong pick-up in Albuterol due to bad flu season and Lanreotide. "Revlimid sales were relatively weaker as compared to the previous quarter." Also, seasonally December quarter is good for the U.S, he said. He has guided for 10-12% ex-covid growth in India business.
Vohra emphasized that the company's performance this quarter in terms of revenue had no no-offs and that it was a normal quarter and the performance could have been better had there not been a lag in South Africa performance.
For the full year, he has maintained ebidta margin guidance in the range of 21-22%.
Other Highlights (YoY)
India business expanded 11% on a Covid-adjusted base of last year. Otherwise, it grew 1.8% on an overall basis.
The company's core portfolio, ex-covid, saw a "robust double-digit traction" in India across therapies and business segments - branded prescription, trade generics, and consumer health.
The U.S. business grew 30% in absolute terms to $195 million (Rs 1,600 crore).
South Africa or SAGA region business, excluding animal health business, contracted 23.8%. The company said that it is addressing supply challenges.
Business in other international markets, including emerging markets and Europe, rose 3.3%.
Bulk drugs fell 1.7% year-on-year.
The company has a cash balance of Rs 6,232 crore as on Dec. 31.
The company's R&D investment stood at Rs 363 crores, 6.2 % of sales. These were 39% higher year-on-year.
"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 the initiation of biosimilar programs,” Vohra said.
India formulations growth, U.S. new launches momentum, stabilisation in South Africa business and R&D are expected to be key growth drivers to watch out for, said Vohra in the call.
The company is also actively evaluating mergers and acquisitions in domestic market.
Launch pipeline and Goa facility update
The U.S. FDA is likely to approve gAdvair within a quarter, while gAbraxane will take another six months, Vohra said in a conference call after earnings. The company expects to launch gAbraxane in the second half of fiscal 2024.
On the Goa facility, Vohra said that the company is in contact with the U.S. regulators and will submit its last corrective and preventive action report by May or June. After this, the facility will be re-audited, Vohra said.
Shares of Cipla were down 2.73% at 2:22 p.m. after results were announced, compared to a 1.04% decline in the benchmark Sensex.