Four reasons why Cipla is going to continue its good performance in the quarters ahead

Cipla's September quarter performance was expected to be good - in continuation of the steady recovery logged by the company in the preceding four quarters. The company surprised the Street by logging its best performance in the last 15 quarters. Net sales grew by 24% and operating profit rose 58%. There are at least four strong reasons to presume why the company's strong performance is likely to continue in the quarters ahead.

The company has enticed fresh talent from other companies and expatriates from outside India. For instance, it roped in Frank Pieters, former senior executive in Teva - the world's largest generic company, to head its European respiratory business. This new talent will help to internationalise the company further and help it to become more competitive.

The company's Indore SEZ facility has received the much-awaited US FDA approval last week. This is going to significantly increase the quantum of products churned out by the facility having got the approval to export to the world's largest pharma market.

The company's strategy of moving away from low-margin anti-retroviral drugs to high margin drugs in chronic therapies seems to be bearing fruit as can be seen from the improving quality of revenues and earnings in case of the exports business. The company is going to take price increases across markets and across therapies to boost its margins going ahead.

The company has strong pipeline of products to be launched in the regulated markets - for instance inhalers in the European markets. The company has filed four ANDAs on its own in the US market in the last six months. Little wonder then that the company has revised its revenue guidance for the current fiscal from 10-12% growth to more than 15% now.