Cipla share price was trading lower by 3 percent at open on May 17 after the company declared its Q4 results.
The pharma company on May 14 clocked a healthy 72.2 percent year-on-year growth in consolidated profit at Rs 411.5 crore driven by operating performance. Earnings on all parameters missed analysts’ expectations.
Consolidated revenue grew by 5.3 percent year-on-year to Rs 4,606.4 crore in Q4FY21, with North America business showing a 17 percent YoY growth and India business 4 percent growth.
Emerging markets registered a 4 percent YoY growth in revenue and Europe showed a 7 percent growth in March 2021 quarter.
“In India, prescription business grew by 6 percent YoY and the sequential normalisation is in-line with expectations. Expanded COVID portfolio is expected to see traction along with core respiratory products,” Cipla in its BSE filing said.
The stock was trading at Rs 890.00, down Rs 14.10, or 1.56 percent at 09:18 hours. It has touched an intraday high of Rs 905 and an intraday low of Rs 888.30.
Also Read: Cipla Q4 profit jumps 72% to Rs 411.5 crore, misses estimates on all earnings parameters
Numbers missed analysts’ expectations. Profit was estimated at Rs 559 crore on revenue of Rs 4,919.4 crore and EBITDA was expected at Rs 1,041 crore with margin at 21.2 percent for the quarter, according to the average estimates of analysts polled by CNBC-TV18.
Global research firm Morgan Stanley has an overweight rating on the stock with a target of Rs 949 per share. It is of the view that the company continues to strengthen its base business in India, the US and South Africa.
JP Morgan has a neutral call on the stock with a target of Rs 785 per share. The firm believes that earnings were weak as US and margin disappointed adding that US sales disappointed despite Albuterol ramp-up and muted gross margin. Management guided to maintaining or improving upon the FY21 margin of 22 percent.
Brokerage firm Goldman Sachs also has a neutral call on the stock with a target of Rs 890 per share. The firm is of the view that the company missed Q4 esitmates, led by 200 bps gross margin impact from shelf stock adjustments in US and inventory write-offs. Seasonal weakness pronounced on the absence of Flu season in both India and key markets, it said.
Domestic brokerage firm Prabhudas Lilladher has an accumulate rating on the stock with a target of Rs 960. “We believe benefit from COVID products will increase from Q1 FY22E again, given the onset of the second wave in India since April. Once the short-term opportunity in Covid-19 portfolio subsides, we expect core India formulations to grow ~8-10 percent, while next leg of growth will be led by US markets based on the launch of inhalation product each year, further ramp-up of gAlbuterol, launch of gRevlimid in FY23E and approval of Tramadol IV,” it said.
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