Cipla shares rally 8% despite 55% YoY slump in Q4 profit. Why Citi, Nuvama, other brokerages hiked target

Shares of Cipla jumped 8% on Thursday as a clutch of brokerages issued bullish calls for the stock even after the pharma major reported a 55% year-on-year (YoY) decline in its consolidated net profit at Rs 555 crore in the fourth quarter. The profit was compared with Rs 1,222 crore recorded in the last year's fourth quarter.

The stock has rallied nearly 11% in the two sessions since the results were announced during market hours on Wednesday, hitting an intraday high of Rs 1,432.10 on Thursday morning.

The company's revenue from operations slipped around 3% YoY to Rs 6,541 crore in the March quarter.


EBITDA fell 35% to Rs 997 crore from Rs 1,538 crore in the year-ago period, while EBITDA margin contracted sharply to 15.2% from 22.8%. For the entire financial year which ended on March 31, 2026, Cipla reported a 2% YoY rise in revenue to Rs 28,163 crore but 26% YoY decline in net profit to Rs 3,879 crore.

Along with the Q4 results, Cipla announced that its board of directors, during their meeting have recommended a final dividend of Rs 13 per share for FY26. The record date to determine the eligibility of shareholders set to receive the final dividend has been fixed on June 5.

Nuvama on Cipla

Nuvama upgraded its rating on Cipla shares to ‘Buy’ from ‘Reduce’, and raised its target price to Rs 1,550 apiece. This implies an upside potential of nearly 17% from the stock’s previous closing price.

The brokerage listed out reasons for the upgrade. Firstly, Cipla trades at 21x, marking around 15% discount to its one-year average forward PE. Secondly, there is comfort in FY28 margin, easing capex, and net cash balance sheet. Lastly, Nuvama sees Cipla potential high value or respiratory launch opportunities. “This addresses our concerns after import alert at Pharmathen’s Rodopi unit. We revise FY27E EPS by 5%, raise PE multiple to 24x,” it said.

“We upgrade Cipla due to margin/capex commentary and upcoming complex/highvalue launches. gVentolin approval indicates Cipla can get its respiratory products approval in FY27E even though Pithampur remains under warning letter,” it added.

Citi on Cipla

Citi maintained its ‘Buy’ call on the shares of Cipla, and raised its target price to Rs 1,700 apiece. This implies an upside potential of more than 28% from the stock’s previous closing price.

The international brokerage said that the firm’s FY27 outlook was robust but realistic, ET Now reported, adding that the firm posted US sales at $155 million despite gRevlimid and Lanreotide phase-out. It added that the FY27 EBITDA margin guidance at 18.5-20% seems to be achievable.

Citi maintained a positive stance on Cipla shares, citing reasonable valuations and visibility on margins and growth.

Emkay on Cipla

Emkay upgraded the shares of Cipla to ‘Add’ from ‘Reduce’, and increased its target price to Rs 1,450 apiece, as downside risk now looks limited. The latest target price implies an upside potential of more than 9% from the stock’s previous closing price.

The brokerage said that the firm’s Q4 EBITDA margin missed expectations, but gross margin beat was a key positive, ET Now reported. It added that domestic sales beat was driven by in-licensed brands. It added that this has been Cipla’s growth trend for last 2 years and will likely continue in FY27

Other brokerages on Cipla

Goldman Sachs maintained a ‘Neutral’ rating on the stock, but increased its target price to Rs 1,350 apiece. Morgan Stanley however maintained an ‘Underweight’ rating. Nirmal Bang, meanwhile, downgraded the stock to ‘Hold’ from ‘Buy’.

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