Cipla shares gain post q3 result as HDFC securities, ICICI Securities see upside of up to 19%

Brokerage house ICICI Securities and HDFC securities have maintained buy rating on Cipla despite the pharma major witnessed marginal decline in net profit. The two brokerage houses see an upside of up to 20 per cent in drug maker.  

ICICI Securities, which upgraded the rating from 'add' to 'buy', has put up a revised target price of Rs1,058 a share in one year. It turns out to be an upside of 14 per cent on CMP of Rs 906 per share. The brokerage bullishness on the drug maker is based on robust outlook and in line q3fy22 result.  

" The company has shown a strong performance over past 5-6 quarters in India business led by COVID-19 portfolio as well as benefits of one India strategy undertaken in FY20 which we believe would help in sustaining above industry growth. US business is expected to scale up on account of complex launches. We upgrade the rating to BUY with a revised target price of Rs1,058/share," it said.  

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HDFC Securities which also upgraded the stock to buy also believes that robust outlook and expected performance in q3fy22 will see this stock doing well in the long term. It estimates a target price of Rs 1115 for this share on CMP of Rs 905, which the stock traded on January 25. This translates into an upside of 19 per cent.   

At 2.30, Cipla shares surged by Rs23.80 per share or 2.63% to Rs 927.90 on back of spurt in volume and expected q3 numbers.  

Speaking of Q3fy22 numbers, Cipla reported a 2.54% YoY decline in the consolidated profit at Rs 729 crore for the quarter ended December 31, 2021. It had posted a profit of Rs 748 crore posted in the corresponding quarter last year. The drug firm's revenue from operations grew 5.99% YoY to Rs 5,479 crore as against a revenue of Rs 5,169 crore posted last year.  

EBITDA remained almost flat at Rs 1,230 crore in the reported quarter as against Rs 1,231 crore posted last year. The margin dropped to 22.4% in Q3FY22 as against 23.8% posted in Q3FY21.