Cipla Q1FY24 – Result Update
Indiastockguru Team
Cipla beat street estimates reporting robust June Quarter 2023. Cipla’s share price jumped 8% after Q1FY24 results were announced. The Indian pharma major reported 45% YoY increase in net profit and 18% YoY jump in revenues in June Quarter 2023. High revenue growth was driven by highest ever quarterly revenue realized from the US market and strong and stable growth from both Indian and South African markets.
Consolidated revenues for the quarter ended June FY24 came in at Rs 6,329 crore compared to Rs 5,375 crore corresponding quarter previous year.
Operating margin stood at 23.6% in Q1FY24 compared to 21.27% in the same period previous year. Operating margin was up 233 basis points YoY in June Quarter 2023. Strong margin expansion was driven by strong growth in high margin US markets. Net profit came in at Rs 996 crore in Q1FY24 compared to Rs 686 crore in the same quarter previous year.
US business drives growth, India One Business on a stable footing
US business which constitutes 29% to total revenue mix reported its highest ever quarterly revenues of $222 Mn, a rise of 43% YoY in Q1 FY24. According to the management, pricing pressures have stabilized in the US market. Speaking on the robust US business growth, Umang Mehra, Managing Director and Global Chief Executive Officer, Cipla said, “A large number of US companies are either amalgamating, merging, or are going bankrupt. That is eliminating a certain number of people in the system. So, we are seeing a rebalancing of the supply chain happening, because of which, our base families are actually growing.” The company’s three differentiated products are undergoing clinical trails, with filings targeted in FY24 and FY25. The company expects to launch 4-5 peptides and a couple of products are expected to be filed in the next 18 months.
One India business revenues (Rs 2,772 crore) grew 12% YoY across branded prescription, trade generics and consumer health. Cipla’s branded prescription business grew strongly across all therapies by 11%, at 2% higher than IPM growth of 9%. Trade generic business maintained its market leadership, with 8% YoY growth, supported by traction in big brands. Cipla added 23 products in its trade generics portfolio in Q1FY24.
Cipla’s consumer health franchise grew by 16% YoY in Q1FY24. Big brands of Cipla consumer health scaled up further by posting double digit growth in revenues. Omnigel, ORS, Nicotex, Cipladine and Cofsils are some of the leading consumer health brands of Cipla. “Summer, unfortunately, only peaked in the north in some parts of June because the rains came earlier and there were rains throughout the summer. So actually, we have seen a slightly more muted quarter than we had expected in our consumer healthcare business.” He further said that first two quarters are largest in consumer health business which was impacted by seasonal variations.
Stable South African business growth
South Africa business grew at 13% YoY in ZAR aided by uptick in focused therapies in prescription business as well as high double-digit growth of 16% in OTC portfolio. Cipla now is the second largest player in prescription market by market share. Strong momentum continues in base business and new launches. International markets reported revenue growth of 9% YoY (Ex-Covid) in rupee terms. The company launched 9 new products in South African market in Q1FY24.
