Cipla reports a 78.7% jump in profits; what should investors do?

Cipla share price: Cipla shares on Monday (May 13) gained over 6 per cent in the morning. The stock rose after numerous brokerages revised their target price on the stock after the company reported its Q4FY24 numbers, on Friday during market hours. 

At around 10:12 a.m., shares of Cipla traded 5.6 per cent or Rs 75 higher at Rs 1,4145.75 apiece. The market capitalisation of the company stood at Rs 1,14,201.98 crore at around the same time.

Brokerage view on Cipla

JP Morgan continued an 'overweight' rating and raised the target to Rs 1,540 from Rs 1,450 apiece.

Meanwhile, CLSA iterated an 'outperform' rating and gave a target of Rs 1,480 apiece. Similarly, Macquarie maintained an 'outperform' rating and gave a target of Rs 1,430 apiece. 

Nomura continued with a 'neutral' and gave a target of Rs 1,569 apiece. Similarly, HSBC iterated a 'buy' and gave a target of Rs 1,600 apiece. 

Conversely, Goldman Sachs maintained a 'sell' and raised the target to Rs 1,265 from Rs 1,250 apiece. Also, Jefferies maintained a 'hold' and raised the target to Rs 1,400 from Rs 1,250 apiece.

How did Cipla fare in Q4?

Pharma major Cipla Ltd on Friday reported a 78.7 per cent jump in consolidated net profit to Rs 931.87 crore in the March quarter on the back of higher sales.

The company had posted a consolidated net profit of Rs 521.51 crore in the year-ago period, Cipla Ltd said in a regulatory filing.

Consolidated total revenue from operations during the quarter under review stood at Rs 6,163.24 crore as against Rs 5,739.3 crore in the corresponding period a year ago, it added.

Total expenses in the fourth quarter were higher at Rs 5,153.31 crore as compared to Rs 4,946.14 crore in the same period previous fiscal, it added.

For FY24, consolidated total revenue from operations was at Rs 25,774.09 crore as compared to Rs 22,753.12 crore in FY23.

Management commentary 

Commenting on the performance, Cipla Ltd MD and Global CEO Umang Vohra said in FY24, the company's revenues crossed the threshold of Rs 25,000 crore, whereas operating margins significantly improved to cross Rs 6,000 core for the first time.

"This was backed by One-India revenue breaching Rs 10,000 crore, North America revenue surpassing USD 900 million and South Africa reaching the top spot in the prescription market, with all three businesses growing in double digits over last year with improved profitability," he added.

On the road ahead, he said, "As we enter into FY25, our focus will be on our priorities of market-leading growth in our key markets, growing big brands bigger, investing in the future pipeline as well as focusing on resolutions on the regulatory front."

Cipla dividend 

The board of directors of the company in its meeting recommended a final dividend of Rs 13 per equity share of face value of Rs 2 each for FY24, subject to approval of shareholders at the ensuing annual general meeting, it said.

Cipla share price: Past performance 

In a year, shares of Cipla have given a return of 45 per cent against Nifty50's rise of over 19 per cent.

(With inputs from agencies.)

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