Cipla Ltd. Q2FY25 Results: Strong Growth Momentum Sustained Across Key Markets!
Views of Prathamesh Masdekar, Research Analyst, StoxBox
– Company reported revenue growth of 5.6% YoY / up 5.3% QoQ to Rs. 7,051 crores, marginally above market expectations of Rs. 6,932 crores.
– In Q2FY25, India’s business reported a single-digit growth of 5% YoY, led by branded prescriptions focused on chronic therapies, which continued to outpace the market growth. Historically, a slow seasonal increase in the acute category has impacted branded prescription and trade generics businesses.
– The US business reported quarterly revenue of USD 237 million, up 4% YoY growth, led by positive traction in the differentiated portfolio. The SAGA region reported a double-digit 22% YoY growth performance, led by an uptick in key therapies and new launches and significant growth in the OTC portfolio.
– EBITDA increased 8.8% YoY / up 9.9% QoQ to Rs. 1,886 crores, while EBITDA margin stood at 26.7% (up 78bps YoY / up 111bps QoQ) in Q2FY25, aided by expansion in gross margins by 226 bps YoY to 67.6%.
– Profit after Tax stood at Rs. 1,306 crores (up 13.0% YoY / up 11.0% QoQ) in Q2FY25, above market expectations of Rs. 1,246 crores. The PAT margin stood at 18.8% compared to 17.8% in the previous quarter and 17.5% reported in the same quarter last year.
– R&D investments rose 2% YoY to Rs. 385 crores (5.5% of sales), driven by product filings and developmental efforts.
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Cipla continues to report healthy numbers, further establishing core business strengths in India, North America, and South Africa. Overall, the One-India branded prescription segment saw slower growth this quarter due to weaker market growth in anti-infectives. However, chronic therapies such as respiratory, cardiac, and urology maintained strong growth and outperformed market trends. In trade generics, seasonal factors affected the acute category’s performance, though Cipla anticipates a return to its growth path in upcoming quarters. The consumer has strong segment growth, with flagship brands Nicotex, Omnigel, and Cipladine sustaining their leadership in their respective categories. South African businesses recorded strong growth annually in local currency, led by the private market. Emerging markets and Europe have also delivered robust revenue growth on the back of a deep market focus strategy. It achieved leadership in the pharma prescription market by consistently outpacing market growth for a few years. We expect Cipla to work towards establishing a robust foundation for growth in upcoming quarters. The focus will be on growing key markets, further building flagship brands, investing in future pipelines, and focusing on resolutions on the regulatory front.
