Cipla expecting a strong earning in Quarter 2

Cipla expecting a strong earning in Quarter 2

Drug maker Cipla, led by its Covid-19 drug portfolio and cost savings, could report a 14-33 percent increase in net profit for the quarter ended September from a year ago.

As new cases peaked in India, Cipla’s Covid-19 drugs like Remdesivir and Tocilizumab were in high demand in the quarter. Nomura expects the company to announce an increase in its net profit of 33 percent, though it estimates that revenues could have increased by 10 percent.
“In India, we factor in 10 % growth YoY, including the contribution from the consumer sector,” Nomura analyst said in a note.

‘Domestic market growth is driven by a) lower 2QFY20 base and higher demand for commercial generics in 2QFY21F; and b) higher demand for COVID-19 products , in particular Remdesivir and Tocilizumab,’ added the brokerage.
Cipla expects Kotak Institutional Equities to record a 14.1 percent rise in net profit, while net sales could have risen by 6 percent compared to a year earlier.

The brokerage expects domestic revenues to increase 10 percent year-on-year (YoY) led by contributions from Remdesivir, Toclizumab and healthy generics trade rise, even as the prescription segment remains silent, while US revenues remain stable at $135 million.

Cipla: Products and operations

Including medicinal and personal care products, company sells active pharmaceutical ingredients to other producers, including Escitalopram (anti-depressant), Lamivudine and Fluticasone propionate. They are the world’s largest source of antirretroviral medicines.

In 8 locations across India, it has 34 manufacturing units and a presence in over 80 nations. For FY 2013-14, exports accounted for 48 percent of its revenue of ⁇ 4,948 crore (equivalent to ⁇ 68 billion or US$ 950 million in 2019). INR 517 cr was invested by the company. (5.4 percent of revenue) on R&D operations in FY 2013-14. New formulations, drug delivery systems and APIs (active pharmaceutical ingredients) have been developed as the key target areas for R&D.

Cipla also cooperates with other companies in fields such as consultancy, commissioning, manufacturing, evaluation of projects, quality management, transfer of know-how, support and supply of plants.

Shareholdings of Cipla

Cipla’s equity shares are listed on the Bombay Stock Exchange, where it is a member of the BSE SENSEX index, and the Indian National Stock Exchange, where it is a member of the CNX Nifty. On the Luxembourg Stock Exchange, its Global Depository Receipts (GDRs) are listed. 
As of 30 September 2014, the party of promoters, Y. K. Hamied and his family had about 36.80 percent of Cipla’s equity shares. There were about 148,000 individual shareholders holding approx. Eighteen.67% of the shares.


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