Target: ₹1,552
CMP: ₹1,414.80
Cipla Q4-FY24 revenue was in line with the expectation, whereas earnings were above our estimates. The company reported a top line of INR 61,632 million (+7.4 per cent y-o-y/-6.7 per cent q-o-q) which was driven by double-digit growth in the North American market and continued growth in India business.
EBITDA reported at ₹1,315.90 crore (+12.1 per cent y-o-y/ -24.7 per cent q-o-q) and margin at 21.4 per cent (+90bps YoY and -511bps QoQ). Adj. PAT was reported at ₹939 crore with a robust growth of 43.7 per cent y-o-y and a decline of 21.6 per cent q-o-q. The management expects to grow the India & SAGA business by faster than the market growth, improve the EBITDA margin by 100bps, and continue to look for inorganic growth opportunities in India and North America markets.
Cipla’s top objective for One India going forward is to maintain leadership in Gx while growing Rx (within the chronic portfolio), and the US will continue to include the commercial execution of the current portfolio, new product launches, and the resolution of USFDA observations.
We expect Revenue/EBITDA/PAT CAGR of 10.6/13/13 per cent during FY24-FY26. We value the stock at 23x FY26E EPS to arrive at a target price of ₹1,552 with Buy rating