4QFY02 would probably be a record quarter for Cipla. The company recorded a stupendeous performance far surpassing market expectations. While sales have leapfroged more than 32%, PAT recorded 80% rise, on the back of strong rise in operating margins. Operating margins have zoomed by more than 980 basis points, after recording a disappointing drop for four consequent quarters.
Operating Profit (EBDIT)
Operating Profit Margin (%)
Profit before Tax
Profit after Tax/(Loss)
Net profit margin (%)
No. of Shares (eoy) (m)
Diluted Earnings per share
P/E (at current price)
Riding high on bulk exports mainly to developed markets, exports have registered a triple digit sales growth, contributing around 48% of total sales. Surprsingly, even the domestic sales growth has recorded a 23% growth outsmarting the industry growth rate of around 11%. Overall, a sharp change in the revenue mix resulted in a smart rise in operating margins on the back of sharp drop in cost of raw material consumed.
Exports of CFC-free inhaler is expected to kick-start by Aug/ September' 02. Further, Cipla has tied up with several US generic companies for supply of bulk drugs, which have first to file status. Some of these products are Omeprazole, Flutamide and Olanzipine which are leading molecules in their respective therapeutic segments. Further, the company is exploring options for possible tie-ups for venturing into biotech and genetic engineering with a suitable foreign partner.
At the current market price of Rs 990, the stock is trading at 26x its FY02 earnings. The stock is likely to see some upward movement on the back of roboust performance in the last quarter and strong triggers for the stock going forward.
LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.
SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India. Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: firstname.lastname@example.org. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407