Cost optimization saves the day for Cipla: Q1 results key takeaways

Mumbai: Cost optimization seems to have paid off well for drug maker Cipla, as it managed to post a rise in net profit for the quarter ended June, contrary to expectations of a decline. The focus now shifts to its offerings to combat Covid-19.

“We are also at the forefront in combating Covid-19 through our strategic partnerships and a spectrum of offerings in our portfolio,” MD and Global CEO Umang Vohra said in the earnings release.

Meanwhile, Cipla’s shares scaled a 52-week high in Friday’s trade, and it remains to be seen how the earnings beat plays out when the market opens on Monday.


Here are the key takeaways from Cipla’s Q1 results:
Profit beats estimates: The company posted a net profit of Rs 566.04 crore in quarter ended June, an increase of 26.6 per cent from a year ago. An ET Now poll had expected the company to report a drop in profit to Rs 310 crore.

Cost optimization saves the day: “We are extremely pleased to report our Q1FY21 performance which reflects the inherent strength of our business backed by agile and resilient operations, cost control initiatives and continued delivery on our strategic priorities,” said Umang Vohra, MD and Global CEO.

“During the quarter, our businesses actively re-imagined their operating models to drive strong growth across markets of India, South Africa, US and focused execution on cost optimization helped drive the quarter EBITDA to 24%,” he added.

Vohra said the company's global lung leadership aspirations continued to gain momentum along with limited competition launches in the US.

Covid-19 pandemic: The group said it continues to closely monitor the impact of the Covid-19 pandemic on all aspects of its business, including how it will impact its customers, employees, vendors and business partners.

India, South Africa deliver: The company said its India business grew by 16 per cent YoY in the quarter with strong growth across the three businesses. In South Africa, overall business continued the strong growth momentum to deliver growth of 17 per cent on a YoY basis in local currency, while its US business reported a 14 per cent QoQ growth.