Cipla Ltd, a leading pharmaceutical company, reported its highest quarterly revenue and Ebitda margin to date, driven by strong sales in India, Europe, and emerging markets, despite challenges in its US operations. Managing Director and Global CEO Umang Vohra indicated that the company anticipates exceeding its margin guidance for the current fiscal year, as it surpassed revenue and profit expectations for the third quarter ending in December.
Ebitda, which stands for earnings before interest, taxes, depreciation, and amortization, is a crucial indicator of profitability. For the quarter ending in December, Cipla achieved an Ebitda margin of 28.1%, an increase from 26.3% the previous year, attributed to a seasonally strong quarter with heightened sales of respiratory medications. Vohra noted, “The margin improves every time we sell more respiratory products, which was the case in quarter three…this margin percentage is not sustainable for Cipla. Quarter four typically sees weaker margins due to reverse seasonality in India.”
The management had previously projected a margin of 24.5% to 25.5% for the entire fiscal year, and Vohra expressed confidence that the company would exceed this target. Amey Chalke, a pharma research analyst at JM Financial Institutional Securities, remarked, “It surprised on margins as the business mix was better, other operating income was higher, and R&D spending was slightly lower during the quarter.” He also emphasized the need for management to clarify US product launches over the next two years, which could significantly impact growth.
Cipla has encountered delays in launching key drugs in the US due to regulatory issues at its Goa facility. Recently, it received a ‘Voluntary Action Initiated’ (VAI) status from the US Food and Drug Administration (FDA) and is starting to obtain approvals for some products from that facility. Vohra mentioned, “We’ve also had two inspections since [the VAI status] and we’re awaiting their classifications based on the timelines set by the agency.”
Cipla’s stock rose by 2.2% to ₹1,427 on the National Stock Exchange. The company plans to launch its breast cancer drug Abraxane, initially expected in FY25, in the second half of the next fiscal year. The launch timeline for its respiratory drug Advair, also filed from its US plant, will depend on regulatory approval. “We’re filing the data from our facility in the US…the facility will be inspected, and it will take six to nine months from there,” Vohra explained. These two drugs are anticipated to help mitigate the impact of losing exclusivity for the generic version of Revlimid by January 2026.
In the October-December period, Cipla reported a 48% year-on-year increase in consolidated net profit to ₹1,571 crore, while total revenue from operations rose by 8% to ₹7,073 crore. The company’s Ebitda also saw a 16% year-on-year growth, reaching ₹1,989 crore.
