Cipla Q1 results preview: PAT may grow 6.5-14% YoY, up to 10% growth seen in revenue

Pharma major Cipla is expected to report a net profit in the range of Rs 1,061 crore-Rs 1,135 crore for the quarter ended June 30, 2024 according to estimates by four brokerages. The year-on-year profit after tax (PAT) growth could be between 6.5% and 14%, these estimates said. On the revenue front, a 7-10% YoY uptick is seen at Rs 6,771 crore - Rs 6,749 crore for the reporting quarter.

While InCred Equities and JM Financial have estimated a 14% PAT jump around Rs 1,135 crore, Kotak Institutional Equities and Axis Securities remain more conservative in their estimates, pegging the net profit growth at 6.5% and 8%.

Likewise, JM Financial's revenue estimate is highest in the pack at Rs 6,879 crore while Kotak's remains most conservative at Rs 6,771 crore.

The company will be announcing its quarterly earnings on Friday, July 26.

Here is what these brokerages expect:

Kotak Equities

Kotak Equities expects Cipla to report a profit after tax (PAT) of Rs 1,061 crore which may go up by 6.5% on the YoY basis and 12.9% on the QoQ basis. The net sales could be reported at Rs 6,771 crore, which may climb by 7% on the YoY basis and 9.9% QoQ basis.

The Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) is seen at Rs 1,559 crore, up by 4.4% on the YoY basis and 18.5% QoQ basis. The EBITDA margin is expected to touch 23%, down by 58 bps from Q1FY24 and up by 167 bps from Q4FY24.

"We expect Cipla to report 9% YoY growth in domestic sales in 1QFY25, led by 8% growth in its organic business and contribution from Sanofi's CNS portfolio. Within the organic business, we expect some impact due to change in distribution model, undertaken by the company in the trade generics segment.

"We build US sales of US$236 mn (+4% qoq), led by higher market share in Albuterol and Lanreotide, along with gRevlimid sales of US$28 mn (tad higher than US$25 mn in 4QFY24). We expect SA sales to grow 21% yoy, on a low base, with growth being boosted by the Actor Pharma acquisition, while in Africa and global access, we factor in a 68% yoy decline, following the divestment of Cipla's Ugandan subsidiary, QCIL, effective November 14, 2023. In addition, we bake in 9% yoy growth in EU/ROW sales. Overall, we expect Cipla's 1QFY25 sales to grow 7% yoy (+10% qoq)," the preview note said.

Axis Securities

Axis sees 8.1% YoY growth in PAT at Rs 1,079 crore while a 15.8% QoQ uptick. Net sales could be reported at Rs 6,778 crore, up by 7.1% YoY and 10% QoQ. EBITDA for the reporting quarter is expected to be at Rs 1,591 crore, higher by 6.5% and 20.9% on the YoY basis and QoQ basis, respectively. Meanwhile, the EBITDA margin for the reporting quarter is seen at 23.5% versus 23.6% in Q1FY24 and 21.4% in Q4FY24.

"Expect $236 million base sales in the US market could be driven by gRevlimid ($28 Mn), Albuterol & Lenotirade," this brokerage said.

JM Financial

JM Financial sees PAT at Rs 1,131 crore, up by 14% on the YoY basis while revenue is estimated at Rs 6,879 crore higher by 10%. EBITDA is pegged at Rs 1,786 crore, higher by 20% on the YoY basis.

"We expect $60 million gRevlimid contribution. We expect 9% domestic growth due to lower acute sales and trade generics’ transition to new operating model,'' JM said in a note.

InCred Equities

InCred has pegged PAT at Rs 1,135 crore, which may go up by 14% YoY and 21% QoQ. The revenue could be reported at Rs 6,749 crore, which may be a 7% YoY uptick while a 10% QoQ gain.

InCred sees EBITDA at Rs 1,658 crore which is an 11% and 26% YoY and QoQ uptick. Meanwhile, the EBITDA margin could be 24.6% in the April-June quarter. This translates into 963 bps YoY gain and 322 bps QoQ gain.

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