Cipla's stock drops over 4% as Q4 earnings fall short of market estimates

The shares of pharma major Cipla Limited witnessed a 4.3 percent decrease on Monday, May 15, as its Q4 earnings fell short of market expectations. The company announced a consolidated net profit of ₹526 crore for the quarter ending in March, reflecting a 45 percent increase compared to ₹362 crore in the same quarter of the previous year.

During Monday’s trade, the stock opened at a price of Rs. 940 per share against the previous close of Rs. 937.45 per share but dropped during the early trading session to touch an intraday low of Rs. 896.85 a piece.

It was trading at Rs. 914.95, down by 2.40 percent, at 11:30 a.m. on the NSE.

The stock touched a 52-week high of Rs. 1,185.25 on November 01, 2022 and a 52-week low of Rs. 852 on March 22, 2023, indicating that at the current levels, the stock is trading over 7 percent above its 52-week low and 22.8 percent below its 52-week high.

The stock has surged nearly 1 percent in the last one month. However, the shares of the company have declined over 18 percent in the last six months. It has grown almost 71 percent in the last five years.

Cipla's EBITDA (earnings before interest, tax, depreciation, and amortization) experienced a substantial surge of 54 percent, amounting to ₹1,174 crore, with margins improving significantly by 596 basis points to 20.5 percent.

Meanwhile, the total revenue from operations registered a 9 percent growth, reaching ₹5,739 crore compared to ₹5,260 crore in the corresponding period of the previous year.

Cipla achieved a significant milestone as its business revenue surpassed Rs. 730 million for the first time, accompanied by the highest quarterly sales of $204 million. The company also announced that it has three distinct products currently undergoing clinical trials, with plans to file for approvals in the fiscal year 2024.

“In FY23, we recorded the highest-ever revenue with EBITDA crossing ₹5,000 crore for the first time. Our one-India business continued the double-digit trajectory growing at 13 percent ex-Covid during the year, led by branded prescription and sustained growth across our acute and chronic therapies," said Umang Vohra, MD & Global CEO of the company.

Additionally, the board of directors has proposed a final dividend of ₹8.50 per equity share for the fiscal year that ended in March 2023. This dividend, subject to approval from the shareholders, will be disbursed within 30 days from the Annual General Meeting (AGM) date.

Headquartered in Mumbai, Cipla Limited is a leading Indian multinational pharmaceutical company. With a focus on respiratory disease, cardiovascular disease, arthritis, diabetes, depression, and various other medical conditions, Cipla specializes in the development of medicines to address a wide range of healthcare needs.

According to a MintGenie poll, 40 analysts on an average have a ‘BUY’ call on the stock.