loader2
NRI

Open DEMAT AND TRADING ACCOUNT WITH ICICIDIRECT

  • 30 Oct 2024
  • ICICI Securities

CIPLA Q2FY25- MIXED NUMBERS WITH SUBDUED REVENUES BUT BETTER MARGINS

News: Revenues grew ~6% YoY to ₹ 7051 crore on the back of ~29% growth in South Africa and 19% growth in Emerging markets and Europe. Growth in core geographies of India and the US was growth was little subdued at ~5%. EBITDA grew ~9% YoY to ₹ 1886 crore with 78 bps margin expansion to 26.7% tracking strong GPM performance (up 226 bps to 67.6%). PAT grew ~13% to ₹ 1306 crore. US grew ~5% YoY to ₹ 1986 crore and this lower trendline growth was attributable to supply constraints for Lanreotide injection (hormonal) at one of the vendors besides ~10% price erosion in the base business  especially oral solids). The market share of Lanreotide (before supply constraints) in the month of August was ~35%. Similarly for Albuterol (respiratory)the market share stood at ~19% (as of September 20). India grew ~5% YoY to ₹ 2948 crore, driven by branded prescription growth of 16% in Urology, ~12% in Cardiac and ~9% in respiratory but pulled down by Anti-infectives (high base) and Trade Generics (seasonality). However, growth in Consumer Health portfolio stood at a healthy 21%. South Africa grew 29% YoY to ₹ 799 crore led by Respiratory, CNS and Anti-Infectives therapies and OTC growth. Emerging markets and Europe grew 19% YoY to ₹ 806 crore with uptick in both DTM and B2B categories.

Views: The US performance was impacted mainly because of supply related issues for Lanreotide and as per management the same will persist in Q3 as well which may drive US sales to be lower than Q2. But the situation is likely to improve in Q4. Going ahead, other key US launches such as gApixaban (in the backdrop of Goa observations) and gAdvair (from the US plant) would be keenly followed. India growth is expected to normalise in the coming quarters. We believe the company is good stead with successful recent launches in the US and a long-drawn India strategy with a blend of branded Rx- Trade Generics- Consumer Health besides South Africa momentum.

Impact: Neutral