Buy Cipla, target price Rs 1110: Prabhudas Lilladher

Prabhudas Lilladher has buy call on Cipla with a target price of Rs 1110. The current market price of Cipla Ltd. is Rs 995.6. 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 81586.39 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 30-06-2022, the company has reported a Consolidated Total Income of Rs 5478.62 Crore, up 2.90 % from last quarter Total Income of Rs 5324.35 Crore and down -1.63 % from last year same quarter Total Income of Rs 5569.28 Crore. Company has reported net profit after tax of Rs 706.56 Crore in latest quarter.

Investment Rationale
Cipla’s Q1FY23 performance was broad based with strong show in domestic formulation and US sales. We continue to remain positive on CIPLA’s growth across key segments including India and US given 1) strong traction in respiratory and other portfolio, 2) Ex-COVID, domestic formulation to potentially grow +10% going forward and 3) meaningful delta in US revs expected from H2FY23, backed by potential key launches. The brokerage expects 16% EPS CAGR over FY22-24E from base business (ex Revlimid) given resilient earnings, improving visibility from US and strong free cash flow generation. Its FY23/24E estimates broadly remains unchanged. Maintain ‘Buy’ rating with TP of Rs1,110/share based on 24x FY24E EPS plus Rs20/share for Revlimid.

Promoter/FII Holdings
Promoters held 33.61 per cent stake in the company as of 30-Jun-2022, while FIIs owned 31.68 per cent, DIIs 17.31 per cent.