Neutral Cipla, target Rs 500: JPMorgan

JPMorgan maintains neutral rating on Cipla but slashed its 12-month target price to Rs 500 from Rs 700 earlier. The latest round of restructuring has impacted stock performance in the last few months.

JPMorgan sees challenges in the near-term with impact from restructuring in emerging markets. The ramp-up in US portfolio should help improve margins from 2HFY17.

The medium term catalysts are improving business mix, key US launches, and respiratory pipeline. The margin expansion is likely to be limited given the fact that there was a step-up in R&D spend. The outstanding regulatory status of Indore facilities is a risk, said the brokerage note.