Buy Cipla, target price Rs 1095: ICICI Direct

ICICI Direct has buy call on Cipla with a target price of Rs 1095. The current market price of Cipla is Rs 939.1.
Time period given by analyst is one year when Cipla Ltd. price can reach defined target.

Cipla Ltd., incorporated in the year 1935, is a Large Cap company (having a market cap of Rs 75727.57 Crore) operating in Pharmaceuticals sector.


Cipla Ltd. key Products/Revenue Segments include Pharmaceuticals, Other Operating Revenue, Export Incentives, Royalty Income and Scrap for the year ending 31-Mar-2021.


Financials
For the quarter ended 31-03-2022, the company reported a Consolidated Total Income of Rs 5324.35 Crore, down -4.41 % from last quarter Total Income of Rs 5570.15 Crore and up 14.10 % from last year same quarter Total Income of Rs 4666.58 Crore. Company reported net profit after tax of Rs 376.72 Crore in latest quarter.

Investment Rationale
Revenues are expected to de-grow ~1.2% YoY to Rs 5439.3 crore, mainly due to 10.5% YoY de-growth in domestic formulations to Rs 2425.5 crore partially offset by US business growing 18.9% YoY to Rs 1234.5 crore. RoW and South Africa market trending 20% & 2% YoY growth, respectively, to Rs 940.8 crore and Rs 646.7 crore, respectively. EBITDA margins expected to decline 450 bps YoY to 20%. EBITDA is expected to de-grow 19.4% YoY to Rs 1085.1 crore. Subsequently, adjusted PAT is likely to de-grow 23.7% YoY to Rs 613.2 crore

Promoter/FII Holdings
Promoters held 33.63 per cent stake in the company as of 31-Mar-2022, while FIIs owned 30.67 per cent, DIIs 17.97 per cent.