Cipla shares plunge over 5% post Q2FY25 results: Brokerages mixed; Goldman Sachs continues with Sell rating
Amid weak guidance, most global brokerages have slashed the target price on Cipla post its Q2FY25 show.
Cipla shares in early trade in Wednesday's session (October 30) slipped over 5 per cent to the day's low price of Rs 1,403.4 after the drugmaker's earnings were announced during market hours in the previous session. For the September quarter, the company's consolidated PAT rose 15 per cent on-year to Rs 1,303 crore in comparison to Rs 1,131 crore posted during the same period last year.
Zee Business analyst pegged net profit to rise 5.7 per cent on-year to Rs 1,195 crore, buoyed by strong domestic growth.
The revenue from operations at the company during the review period also grew 6 per cent year-on-year (YoY) to Rs 7,051 crore as against Rs 6,678 crore reported in the same quarter last year.
EBITDA growth was recorded at 12 per cent to Rs 1,886 crore in the second quarter.
Overall, Zee Business analysts held that the country's third largest pharma company posted weak Q2 performance with muted guidance.
Here's how global brokerages view the Cipla stock post its Q2FY25 performance
Nomura has continued with its 'neutral' call on the stock with the target pegged at Rs 1,568. The brokerage said the company posted in-line quarter but a weak narrative. For FY25, the management retained guidance with EBITDA margin projected in the range of 24.5-25.5 per cent. The company's management underscored seasonal weakness In Prescription & Trade Generic segments, while the consumer health segment logged strong growth during the review quarter.
The brokerage added that the company's generic sales in North America declined sequentially due to lanreotide supply constraints and this trend shall persist with more decline in Q3 with recovery anticipated in Q4.
Furthermore, for the EM and Europe business, the company's management expects sustainable growth rate at 10 per cent.
Meanwhile, Goldman Sachs has continued with its 'sell' call on the counter with the target slashed to Rs 1,350 from the earlier Rs 1,425 per share, implying a downside of nearly 9 per cent from the previous close.
On the contrary, HSBC has given a 'buy' recommendation on Cipla with the target slashed to Rs 1,755, implying substantial gains of as much as 19 per cent.
Jefferies also has reiterated its hold call on Cipla with the target raised by a tad to Rs 1,480 from the earlier Rs 1,450 per share.
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