Cipla Shares Tank Despite Strong Earnings

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Cipla Shares Tank Despite Strong Earnings

Aug 6, 2021

Shares of Cipla fell 3.5% on the exchanges today even as the company posted robust results for the June 2021 quarter.

The company reported a 27% year on year (YoY) rise in income from operations at Rs 55 bn for the quarter, which was higher than analysts' expectations.

The sharp growth in the company's top line was aided by a robust quarter for the Indian operations, which is the biggest revenue generator for Cipla.

Sales in India grew 68% YoY to Rs. 27.1 bn as the company benefitted from a surge in demand for Covid-19 medicines due to the second wave of the pandemic.

The top-line was also aided by the US business where sales grew 2% YoY aided by the success of its respiratory drug Albuterol.

In the SAGA business (South Africa, Sub Saharan Africa, and Global Access) the company's revenue grew 10% YoY.

Business Wise Sales Performance

On the operating front, Cipla benefitted from strong top line growth and cost control measures.

The company's consolidated operating profit jumped 28% YoY to Rs. 13.5 bn while margins expanded 32 basis points to 24.5%.

As a result, the company's net profit for the quarter increased by 25% YoY.

For the quarter, the company spent Rs 2.6 bn on research and development. The company has also planned a capex of Rs 7-9 bn for the financial year 2022 for automation and digitization at its current facilities.

--- Advertisement ---
Watch this Before Investing Your Money in EV Stocks

On Monday, we revealed this massive 15x opportunity in electric vehicles.

And also shared the details of 3 EV stocks to ride this mega opportunity.

Now, these are not typical EV stocks. Instead, these are what we call the backdoor EV stocks.

As per our research, the best way to ride the 15x EV wave is through these 3 stocks only.

You can get full details by watching this video...
------------------------------

India business gains traction on Covid-19 portfolio

Cipla's domestic business grew by 68% YoY on the back of strong volume traction in the core therapy and Covid-19 portfolio (Remdesivir, Actemra, Tocilizumab/Roche).

Excluding Covid-19 products, sales grew 47% YoY.

The branded prescription business continued its market-beating performance driven by volume growth in core therapies and support from the existing Covid-19 portfolio through the second wave.

Acute and respiratory nebulisation segments also recovered as well.

The company's trade generics business reported healthy order flow across regions as lockdowns disrupted doctor-patient contact.

The One-India strategy saw tailwinds, with Cofsils, Cipcal, and Omnigel showing strong YoY growth and new brands such as ORS and Cipladine seeing a strong uptick in sales.

Cipla India-Business Market Share & Growth

US and SAGA business gain market share

The US, which contributed about a fifth of the overall revenues, saw stable growth. The contributions from respiratory inhaler Albuterol continue to drive growth which has resulted in market share gains for the company.

Cipla has 74 ANDAs pending approval in the US currently. Furthermore, it has three peptide products in the US pipeline, two of which it has already filed in the financial year 2021.

2023 is expected to be an exciting year for Cipla, with potential approvals for Advair and Revlimid. Cipla is expected to respond to the USFDA's queries on Advair this month.

--- Advertisement ---
[Alert] Sell These 3 Stocks Immediately

These 3 stocks are ticking time bombs in your portfolio.

It is very likely that you could be owning these 3 overvalued...

fundamentally weak... ready to crash stocks... in your portfolio today.

Because many stock brokers have painted rosy pictures of these stocks. But the reality is starkly different.

If the market crashes, then these stocks could wipe out your wealth.

You should get rid of these stocks as soon as possible.

Click her for full details of these 3 landmines
------------------------------

Among others, the African (SAGA) business marked a 10% YoY growth in revenue and 13% YoY growth in dollar terms. The geography contributed about 15% to overall sales.

The company said that it saw double-digit growth and market share gain in the Antiretroviral and oncology private market. It also moved up three places to third, in systemic anti-infectives private market.

Moving forward, the extraordinary gains accrued by the Covid-19 portfolio may moderate.

Nevertheless, the strong chronic portfolio of the company and pick up in acute segment sales bode well for domestic sales growth.

Meanwhile, as India sales grow well, the developing respiratory portfolio in the US and regular rollout of products keeps outlook firm.

How the markets reacted to Cipla's June quarter results today...

Shares of the company opened the day lower at Rs 943 on the BSE and Rs 939 on the NSE today after the company reported its results for the June 2021 quarter.

The scrip then fell as much as 3.5% on the exchanges.

Over the last 30 days, the share price of Cipla is down by 5.9%.

Instant Updates: Join Our Telegram Channel and Get Instant Updates

In the last year, the share price has moved up by 24.8% as against a 43% rise in the S&P BSE Sensex.

The share touched its 52-week high of Rs 997 and a 52-week low of Rs 701.5 on 30 June 2021 and 9 September 2020.

About Cipla

Cipla is one of the leading pharmaceutical companies in India. It was incorporated in the year 1935 with the name Chemical Industrial & Pharmaceutical Laboratories.

The company focuses on the development of new formulations and has a wide range of pharmaceutical products. Its strengths in the respiratory, anti-retroviral, urology, cardiology, anti-infective, and CNS segments are well-known.

The company has 46 manufacturing sites around the world that use cutting-edge technology to cater to over 80 markets.

Cipla is ranked as the 3rd largest pharma company in India and is among the major generic players in the US.

For more details about the company, you can have a look at Cipla's factsheet and quarterly results on our website.

You can also compare Cipla with its peers.

Cipla vs Sun Pharma

Cipla vs Dr Reddy's Lab

Cipla vs Lupin

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...

Ayesha Shetty

Ayesha Shetty is a financial writer with the StockSelect team at Equitymaster. An engineer by qualification, she uses her analytical skills to decode the latest developments in financial markets. This reflects in her well-researched and insightful articles. When she is not busy separating financial fact from fiction, she can be found reading about new trends in technology and international politics.

Equitymaster requests your view! Post a comment on "Cipla Shares Tank Despite Strong Earnings". Click here!

  

More Views on News

CIPLA 2020-21 Annual Report Analysis (Annual Result Update)

Oct 20, 2021 | Updated on Oct 20, 2021

Here's an analysis of the annual report of CIPLA for 2020-21. It includes a full income statement, balance sheet and cash flow analysis of CIPLA. Also includes updates on the valuation of CIPLA.

5 Indian Pharma Companies Riding the Vaccination Wave (Views On News)

Sep 3, 2021

These companies are likely to benefit the most from Covid-19 vaccines.

Cipla's New Covid-19 Drug to Be Sold at Rs 59,750 Per Dose (Views On News)

May 25, 2021

The first batch of Roche's antibody cocktail has been launched in India, with the second batch to be made available by mid-June.

What's Behind the Rally in Pharma Stocks? (Views On News)

May 11, 2021

The second wave of Covid has given a new lease of life to pharma stocks.

Demerger of Financial & Pharma Businesses puts Piramal Enterprises in Limelight (Views On News)

Oct 8, 2021

The company's shareholders will be issued 4 shares in the demerged entity for every 1 held in Piramal Enterprises.

More Views on News

Most Popular

Differences Between Trading and Investing

A simple to guide to understand the difference between investing and trading

Tata Group Stocks are on Fire: Which one Should You Buy? (Profit Hunter)

Oct 15, 2021

Tata group stocks are on fire. Find out which one deserves your attention.

India's Big PSU Selloff: Watch Out for these Top Stocks (Views On News)

Oct 15, 2021

The government's plan to divest its stakes in PSUs could spark off a rally in these four stocks.

Up 31,500% in a Year! This Packaging Company Sheds its Penny Stock Status (Views On News)

Oct 18, 2021

What's driving the relentless rally in this packaging company?

Insider Alert! Promoters are Increasing their Stakes in these 5 Companies (Views On News)

Oct 19, 2021

Promoters of many small and mid-cap companies are raising their stakes since the last few quarters.

More

Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2022
Get our special report Multibagger Stocks Guide (2022 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

CIPLA SHARE PRICE


Oct 27, 2021 (Close)

TRACK CIPLA

COMPARE CIPLA WITH

MARKET STATS