Cipla surges over 6% despite weak Q2 numbers

Morgan Stanley has maintained an ‘underweight’ rating on Cipla with a revised target of Rs 520 against Rs 440 earlier. The brokerage said that PE valuation appears full at 21 times for FY18. Morgan Stanley has cut FY17 net profit estimates for the pharma company by 8.9 per cent.

“Cipla posted lower-than-expected numbers. The company posted sales of Rs 3,672 crore against projection of Rs 3,737 crore, registering a 9.2 per cent YoY growth, aided mainly by domestic formulations. We maintain our reduce rating on the stock,” said Sarabjit Kour Nangra,VP Research for pharma at Angel Broking.

The company said total revenues for the quarter increased 8.6 per cent on a YoY basis to Rs 3,671.88 crore from Rs 3,379.35 crore reported for the year-ago period. Total income increased from Rs 3,485.88 crore for the same quarter last year to Rs 3,778.25 crore this time around.