Comments
Centrum Broking
Cipla (Buy)
CMP: ₹670.40
Target: ₹790
Cipla has reported 14 per cent y-o-y growth in domestic revenues (43 per cent of total) to ₹1,200 crore from ₹1,050 crore due to strong growth in respiratory, anti-infective, cardiovascular and gastrointestinal segments. According to IMS MAT-December 2014 data, five of its top 10 brands grew faster than the market. Its formulation exports (46 per cent of revenues) declined 6 per cent y-o-y to ₹1,274 crore from ₹1,360 crore due to supply constraints. The company’s API exports (6 per cent of revenues) declined by 4 per cent y-o-y to ₹151 crore from ₹158 crore due to higher captive consumption. We expect the domestic business to drive future growth. We maintain ‘Buy’ rating for Cipla with revised target price of ₹790 based on 24x December 2016E EPS of ₹32.8 with an upside of 19.6 per cent from CMP. We have revised our FY15E and FY16E EPS by 7 per cent and 6 per cent respectively. Cipla has launched its combination inhalers in various global markets. With the supply arrangement of generic Nexium to Teva and good growth in the domestic market, we expect the company to perform well from FY16. Key risks to our assumptions include slowdown in global generic business and regulatory risks for its manufacturing facilities catering to global markets.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.