Result Analysis: Cipla Ltd. Result Update Q3FY22


Particulars (In Rs. Cr.) Q3FY22 Q2FY22 Q3FY21 QoQ % YoY%
Revenue from Operations 5479 5520 5,169 -0.7% 6.0%
Other Income 91.3 60.7 86.9 50.5% 5.0%
Total Income 5570.2 5580.5 5255.6 -0.2% 6.0%
Raw Material Consumed 1,524.8 1,382.7 1,353.3 10.3% 12.7%
Stock Adjustment -98.0 -121.5 35.6
Purchase of finished Goods 716.6 875.5 604.5 -18.1% 18.5%
Employee Benefit Expenses 872.4 877.8 844.4 -0.6% 3.3%
Other Expenses 1232.1 1279.1 1100.0 -3.7% 12.0%
EBITDA 1231 1226 1231 0.4% 0.0%
Finance Cost 20.68 38 47.92 -45.6% -56.8%
Depreciation 247.47 253.06 248.43 -2.2% -0.4%
Tax 295.16 283.81 268.96 4.0% 9.7%
Profit After Tax 759 712 753 6.6% 0.9%
EBITDA Margin 22.47% 22.21% 23.81% 25 bps (135) bps
PAT Margin 13.63% 12.76% 14.32% 87 bps (69) bps
Business Wise Performance (In Rs. Cr.) Q3FY22 Q2FY22 Q3FY21 QoQ % YoY%
India (Rx + Gx + CHL) 2518 2416 2,231 4.2% 12.9%
North America 1124 1060 1033 6.0% 8.8%
SAGA 892 994 913 -10.3% -2.3%
International Markets 738 710 741 3.9% -0.4%
API 150 172 201 -12.8% -25.4%
Others 56 56 50 0.0% 12.0%

Result Highlight: 

  • Consolidated Revenue of Cipla for Q3FY22 registered strong growth of 6% YoY at Rs 5479 Crore beats the street estimates of Rs. 5295 Crore.

  • Net profit is up 1% YoY to Rs 759 crore. Sequentially Net Profit rose 6.6% led by higher other income and lower finance cost.

  • EBITDA margin rose sequentially by 25 bps to 22.47%. Margins down 135 bps YoY due to higher Cost of Good Sold and Other Expenses.

  • India Business grew by 13% YoY led by sustained momentum across core therapies and traction in flagship brands; modest contribution from covid portfolio.

  • US business Reported USD 150Mn revenue with robust momentum in core formulation business and strong traction in respiratory portfolio.

  • SAGA declined 4% YoY in US$ terms. South Africa private business grew 16% YoY in ZAR (Curreny of South Africa) terms and maintains market beating trajectory in secondary terms; tender business performed in-line with expectations.

  • Maintained its leadership in respiratory products with market share of 22.6% however market share is down from 23.1% in Q2FY22. In Urology market share is at 14.4%.

  • In Albuterol, Cipla’s TRx market share stood at 15.9% of the overall market as per IQVIA week ending 21st December 2021 increased from 14.6% for the overall market as per IQVIA week ending 8th October 2021.

  • In Arformoterol, Cipla’s TRx market stood at 26.8% of the overall market as per IQVIA week ending 21st December 2021 increased from 24% for the overall market as per IQVIA week ending 8th October 2021

  • New approval: Lanreotide injection 505 (b)(2); expands peptide portfolio

  • Products such as Omnigel, Cipladine, Cofsils, Prolyte ORS and Clocip delivered over 40% YoY growth in 9MFY22

  • Total Debt reduced from Rs. 1100 Crore in Q2FY22 to Rs. 880 Crore.

  • The board approved the transfer of the following undertakings as a going concern on a slump sale basis – 1) India based US business undertaking to Cipla BioTec and 2) Consumer business undertaking to Cipla Health


Management commentary: Umang Vohra MD and Global CEO, Cipla Ltd 

I am pleased to see the strong launch and commercial momentum across our core markets during the quarter. Our portfolio execution in branded markets of India & South Africa and strong respiratory traction driving our US generic franchise to a multi-quarter high quarter were key drivers. The unlocking of our first 505(b)(2) peptide asset, lanreotide injection is an important step in strengthening our complex generics engine, inching up our US footprint. Our EBITDA margins for the quarter came in at 22.7% and given the YTD traction, we are well placed to close the year in-line with our guidance of 22%. We continue our efforts to improve patient access for therapies including covid products and ensuring adequate supply across all our markets. 

Concalll Takeaways: 

Covid portfolio declined 10% YoY and 17% QoQ. Core business except Covid grew 16% YoY.

Expects significant momentum in US business from H2FY23 onwards on the back of possible approvals and launches of gRevlimid, gAdvair and gAbraxane besides momentum gains from Albuterol portfolio

Q3FY22 break-up: South Africa Private: US$60 million, South Africa Tender: US$23 million and Others: US$36 million

Global consumer business contributed ~8% to overall revenues YTD

R&D spend: Rs.  262 crore with priority projects on track, R&D to be around 7- 7.5% in future


Cipla has leadership positions across respiratory and urology segments, and have fifth rank in cardiology in India. Cipla Maintained its Robust momentum across key markets in Q3FY22 with strong traction in One-India and US business. Cipla’s strengthens its complex generics presence with the good response from Albuteral product and market share gain amid rise in demand for Albuterol products in the ongoing Covid-19 pandemic along with approval for first peptide asset, Lanreotide injection. Cipla files 2 important respiratory products filed in Europe. Other product launches and approvals are also continuing to accrue benefits. The consumer health business accounts for 5-6 percent of Cipla’s overall turnover which it aims to take beyond 12 per cent in the next five years. At the CMP of Rs. 902, Cipla is trading at PE multiple of 26.7x.  Valuing the company at 21x FY23E EPS, we recommend buy on Cipla at CMP of Rs. 902 for the Target Price of Rs.1140.

Source: BSE, Bloomberg Quint, EW Research

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