On Wednesday, the pharmaceutical company Cipla Ltd. (CIPLA:IN) stock maintained its Hold rating with a consistent price target of INR1,580.00, as per CLSA. The firm's analysis points to subdued near-term growth prospects for Cipla, citing plant issues that are expected to postpone the launch of new products.
Despite these challenges, Cipla reported revenue in line with expectations and an improvement in Ebitda margin, marking the highest level ever due to a favorable product mix.
The company's U.S. sales saw a year-over-year increase of 5.2% in rupee terms, although these figures were affected by supply chain disruptions in gLanreotide. Meanwhile, sales in India experienced a 4.7% year-over-year growth, which was tempered by slower growth in acute therapy. Cipla has reaffirmed its forecast for the India business to surpass the growth of the overall India pharma market (IPM) by fiscal year 2025.
However, CLSA has revised its revenue projections for Cipla downward through fiscal years 2025 to 2027. This revision is driven by anticipated slower growth in the Indian market, reduced sales of gLanreotide, and potential delays in the introduction of new products due to ongoing issues at the manufacturing plant.
Despite these revisions, the target price remains unchanged at INR1,580.00, even after adjusting the valuation period to September 2026 trailing twelve months (TTM) earnings from the previously considered June 2026.
In conclusion, CLSA continues to advise a Hold stance on Cipla shares amidst a backdrop of moderated revenue expectations and operational challenges that could affect the company's product pipeline and market performance in the near term.
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