Cipla Share Price may remain bullish till Rs 1680, add it to watch list immediately

Cipla Share Price. jumped over 2.5% in early trade today after the pharmaceutical major reported a strong set of financial results for the first quarter ended June 30, 2024. The stock touched an intraday high of ₹1,680, before settling at ₹1,660, up 2.2% from its previous close.

Cipla Q1 FY2025 Highlights:

• Consolidated revenue grew 15% year-on-year to ₹6,694 crore
• Net profit increased 12% to ₹1,050 crore
• EBITDA margin expanded by 100 basis points to 22.5%
• Robust performance across domestic formulations, API, and global access segments

Analysts Remain Bullish on Cipla’s Growth Trajectory

Following the impressive Q1 results, analysts have reiterated their positive stance on Cipla’s long-term growth prospects. Here’s what they have to say:”Cipla’s strong brand equity, diversified product portfolio, and strategic investments in high-growth segments like respiratory and biosimilars position it well for sustainable growth. We maintain our ‘Buy’ rating with a target price of ₹1,830, implying an upside of 10% from current levels.”

• Motilal Oswal, Brokerage House

“Cipla’s consistent focus on operational efficiencies, cost optimization, and portfolio rationalization has paid off. We expect the company to continue delivering healthy double-digit revenue and profit growth over the next 2-3 years. Maintain an ‘Accumulate’ rating with a target price of ₹1,680.”

• Prabhudas Lilladher, Brokerage House

Key Growth Drivers for Cipla

1. Robust performance in domestic formulations: Cipla’s India business grew 18% year-on-year, driven by strong traction in chronic therapies like respiratory, anti-diabetics, and cardiovascular.
2. Expansion in API and global access segments: The company’s API business recorded a 15% growth, while the global access segment (which includes exports to emerging markets and institutional business) grew 12%.
3. Successful launch of new products: Cipla launched several new products during the quarter, including a biosimilar of Bevacizumab (used in cancer treatment) and a generic version of Tofacitinib (for rheumatoid arthritis).
4. Improved operational efficiency: The company’s focus on cost optimization and digitalization initiatives helped improve EBITDA margins by 100 basis points to 22.5%.

Valuation and Outlook

At the current market price of ₹1,660, Cipla trades at a P/E multiple of 31.2x based on its trailing twelve-month earnings. This is in line with its 5-year average valuation. Given Cipla’s strong brand positioning, diversified product portfolio, and robust growth prospects, most analysts believe the stock has further upside potential from current levels. The consensus target price of ₹1,730 implies an upside of 4.2% over the next 12 months.

Key Risks to Consider

1. Regulatory hurdles and pricing pressures: Any adverse regulatory changes or increased pricing pressures in key markets like the US and India could impact Cipla’s profitability.
2. Delay in new product launches: Slower-than-expected progress in the company’s pipeline of new products, especially in high-value segments like respiratory and biosimilars, may affect growth.
3. Currency fluctuations: As Cipla has significant exposure to emerging markets, its earnings could be impacted by adverse currency movements in these regions.

Disclaimer: The information given in this article is from investment experts and brokerage companies, they do not represent Local Haryana. Before taking any investment related decision, you must consult a certified expert.