Indiastockguru team
Cipla reported strong Q2FY24 results supported by US and India markets. Cipla is ranked 3rd largest in pharma in India, 2nd largest in the pharma prescription market in South Africa and 4th largest by prescription in the US Gx inhalation products. The company has strengths in the respiratory, anti-retroviral, urology, cardiology, anti-infective and CNS segments. Cipla’s 47 manufacturing sites around the world produce 50+ dosage forms and 1,500+ products using cutting-edge technology platforms to cater to our 80+ markets. Cipla’s triple anti-retroviral therapy in HIV/AIDS at less than a dollar a day in Africa in 2001 is widely acknowledged as a defining contribution in the HIV movement.
Cipla’s operating revenues came in at Rs 6,678 crore in Q2FY24 up 14.6% YoY. Operating margins stood at 25.96% in September Quarter 2023, rising 360 basis (bps) YoY. Net profit stood at Rs 1,131 crore in Q2FY24, up 43% YoY compared to Rs 789 crore in the same period previous year. Cipla has five business segments, One India, North America, SAGA, Emerging markets & Europe and API.
One India revenue was up 10% YoY driven by strong execution across branded prescription and trade generics businesses. According to the management, branded prescription continues to outpace market growth while seasonal trends impacted the consumer business for the quarter. North America quarterly revenue scaled to $ 229 million driven by 28% YoY growth and QoQ growth of 3% in dollar term. In rupee terms, North America business grew to Rs 1,887 crore, up 32% YoY. According to the management, strong momentum continues with key milestones achieved across multiple pipeline assets. South Africa’s private market grew at 12% YoY in local currency terms and in rupee terms to Rs 993 crore up 14.5% YoY in Q2FY24. Strong performance was aided by robust performance in prescription and OTC. Emerging markets and API business segments fell 4% YoY in Q2FY24. Cipla’s R&D investments stood Rs 379 crore equivalent to 5.7 % of sales, up 13% YoY driven by continued progress of clinical trials on key pipeline assets. The company has strong balance sheet health with robust net cash position of INR 5,850 crore.
Speaking on strong September Quarter 2023 results, Umang Vohra, Managing Director and Global CEO at Cipla said, “We reported our highest ever quarterly revenue with EBITDA margins scaling up to 26%. One-India business grew at a healthy 10% YoY with continued market beating performance in the branded prescription and trade generics business. In South Africa, the private market business grew in double digits driven by strong execution across prescription and OTC. The North America business scaled up to $229mn, growing 28% YoY, driven by strong traction across core products with share expansion in differentiated assets. Our pipeline is progressing really well with key milestones achieved in respiratory and peptide assets. We will continue our focus on driving profitable growth across businesses”
Apart from strong branded prescription business, trade generics business is also doing well. Trade generic business delivers double-digit growth despite weak seasonality. Margins were also aided by declining raw material costs. In the consumer health business, quarterly performance was impacted by inconsistent weather patterns. Core portfolio remains strong with 5 brands over Rs 100 Cr sales in trailing twelve months
