Cipla Q2 Results: Profit Dips But Meets Estimates, Revenue Flat Sequentially
Cipla's Q2 revenue flat sequentially as contribution from Covid portfolio declines.
Cipla Ltd.'s second-quarter profit fell but met estimates as contribution from its Covid portfolio declined.
The Mumbai-based drugmaker's net profit declined 0.47% sequentially to Rs 711.4 crore in the quarter ended September, according to its exchange filing. That compares with the Rs 701.2-crore profit estimate of analysts tracked by Bloomberg.
Revenue inched up 0.28% sequentially to Rs 5,519.8 crore. Analysts pegged the metric at Rs 5,245.5 crore.
Ebidta fell 9% to Rs 1,226.2 crore over the previous quarter. The estimate was Rs 1,187.7 crore.
Ebitda margin stood at 22.2% against 24.5% in the previous quarter. The estimate was 22.6%. As much as 80-100 basis points in the sequential decline could be attributed to an "adjustment" in its Covid-19 portfolio that shall be seen over the quarters, the company said.
"The company saw strong momentum in core therapies across our branded markets and sustained cost control, offsetting price erosion and normalising covid contribution," Umang Vohra, managing director and global chief executive officer of Cipla, was quoted as saying in the filing.
"Our collaboration with Eli Lily for their diabetes products helps us further strengthen our endeavour of creating access to innovative medicines in-line with the One-India strategy." The U.S. business also witnessed healthy run rate driven by core portfolio and desired traction in respiratory franchise across Albuterol and Arformoterol, he said.
The company is optimistic of continuing to maintain 22-23% Ebidta margins going forward. "While a strong launch momentum could be the tailwind, commodity inflation could be a headwind for the company."
Other Highlights (QoQ)
India sales fell 11% to Rs 2,416 crore, contributing 44% to total sales. There was an approximate 60% decline in covid portfolio contribution over the previous quarter, the company said at the earnings call. However, normalisation of the segment was in line with expectations and the company sustained volume traction across core therapies.
U.S. business grew 2% to Rs 1,055 crore, comprising 19% of total revenue. This was supported by steady momentum in core products offsetting price erosion in rest of the portfolio. The company said at the earnings call that launch of newer products will continue to aid growth in the U.S. market.
Overall South Africa (SAGA) region business, excluding animal health business, grew 19% while business in other international markets, which includes emerging markets and Europe, grew 41% sequentially.
SAGA contributed to 18% of the total revenue for the quarter while international markets made up 15%.
Bulk drugs business-which is 3% of the total revenue, fell by 43% over the previous quarter which had a high base on account of a one-time profit share on the commercial supply of an active pharmaceutical ingredient to a partner.
The company ranked second in the overall chronic portfolio in India and was the market leader in respiratory and urology therapies as on September, according to IQVIA MAT data.
Shares of Cipla rose 0.6% on Oct. 26 ahead of the earnings announcement exactly in line with the movement of 0.63% of the S&P BSE Sensex.