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Cipla Ltd: More Excitement in Store - Views on News from Equitymaster
 
 
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  • Apr 26, 2001

    Cipla Ltd: More Excitement in Store

    The year goneby was a landmark year for pharma major Cipla, as its sales crossed the crucial Rs 10,000 m mark. Bouyed by increasing export presence the company recorded 38% rise in sales. Operating margins inched up further to a record 20.6%, up by 70 basis points. Cipla lauched more than 100 products in the last year including a wide range in therapeutic segments.

    (Rs m) FY00 FY01 Change
    Sales 7,597.5 10,476.5 37.9%
    Other Income 357.4 396.0 10.8%
    Expenditure 6,083.4 8,319.2 36.8%
    Operating Profit (EBDIT) 1,514.1 2,157.3 42.5%
    Operating Profit Margin (%) 19.9% 20.6%  
    Interest 11.4 9.1 -20.2%
    Depreciation 133.4 155.0 16.2%
    Profit before Tax 1,726.7 2,389.2 38.4%
    Other Adjustments - -  
    Tax 396.0 605.0 52.8%
    Profit after Tax/(Loss) 1,330.7 1,784.2 34.1%
    Net profit margin (%) 17.5% 17.0%  
    No. of Shares (eoy) (m) 60.0 60.0  
    Diluted Earnings per share 22.2 29.7  
    P/E (at current price)   37  

    In a related major development all the major MNC's withdrew patent litigations against the south African government for supply of Anti-AIDS drug which has come as a blessing in disguise for the company. The company's manufacturing facility is capable of catering to more than 0.1 million AIDS patients.

    The company's strategy of identifying and exploring new niche therapeutic segments to offer superior products at competitive prices seems to be paying off. The company recently launched CFC-free anti-asthma inhalers which is expected to find a huge export market. It has also ramped its research activities in its key anti-asthma therapeutic segment. Besides, with several exclusive tie-ups for generic supply and commencement of Omeprazole plant the company is all set to tap the vast US generic market.

    Thus there seems to be lot of excitement in store for the company in the coming months. At the current market price of Rs1,090, the stock is trading at a P/e of 37 times its FY01 earnings.

     

     

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