Cipla hits 52-week high on robust Q1 earnings; domestic sales rebound

NEW DELHI: Cipla Ltd surged over 6 per cent to hit its 52-week high of Rs 363.60 in opening trade on Wednesday after the drugmaker reported a 52 per cent increase in net profit to Rs 401 crore from Rs 253 crore in the same quarter of last financial year.

At 10:50 a.m., the stock was trading at Rs 355.25, up 4.93 per cent on the Bombay Stock Exchange. It has hit a high of Rs 363.60 and a low of Rs 354.05 in trade today.
"India's second-largest pharmaceutical company by revenue, turned around its domestic business after a long slumber as the company declared a 30% growth in domestic sales for the quarter ended June 2012," ET reported.

Cipla's revenues for this quarter were at Rs 1,864 cr, a 24 per cent growth from the previous year. Raw material cost as a proportion of net sales dropped by 490 bps to 38.2% over year-ago levels.

"A low base, favourable currency movement and strong growth in the domestic market helped the drug major to report a 23.7% growth in net sales and 50% growth in operating profit," said the report.

"Cipla is one of our preferred stocks in the pharma sector, given its strong exposure to India and emerging markets," UBS said in a report.

“We believe products like Dymista and approvals for inhalers could help Cipla maintain revenue growth. Also, management raised FY13 revenue growth guidance to 12-15 per cent from 10 per cent, and also expects margins to improve in FY13,” the report added.

UBS maintains a 'buy’ on Cipla with a target price of Rs 390.