Cipla Q4 Results Preview: Profit may rise up to 71% YoY on healthy operations
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Synopsis
Cipla Q4 Results Preview: As per the combined projections of four brokerages, there's a possibility of the net profit for the fourth quarter surging by as much as 71% year-on-year, alongside an expected 7% year-on-year increase in net sales.
In the recent third quarter, Cipla reported a 32% year-on-year jump in its consolidated profit at Rs 1,056 crore.
Most analysts expect Cipla to report 10% year-on-year growth in domestic sales in 4QFY24. Margins for the reporting quarter may decline sequentially due to lower gRevlimid sales and higher marketing spend.
Here's what to expect from Cipla's Q4
Kotak Equities
We expect SA sales to grow 3% year-on-year in 4QFY24, while in Africa and global access, we factor in a 10% quarter-on-quarter decline, due to divestment of Cipla's Ugandan subsidiary, QCIL, effective November 14, 2023. In addition, we bake in 5% year-on-year growth in EU/ROW sales. Overall, we expect Cipla's 4QFY24 sales to grow 10% year-on-year (-5% quarter-on-quarter)."
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It further adds, "We expect gross margin to decline 270 bps quarter-on-quarter to 63.7% and bake in sequentially higher R&D expenses at 6.4% of sales. We expect overall EBITDA to grow 17% year-on-year to Rs 1370 crore, with 470 bps quarter-on-quarter EBITDA margin decline to 21.8% in 4QFY24 on account of seasonal weakness."
Nuvama
Q4 is usually a softer quarter for Cipla owing to weak seasonality in India and US. However, on a year-on-year basis we expect India to post +12% growth with organic growth expected at 9.5% and the rest from the Galvus deal. US to moderate quarter-on-quarter to $223million (-3% quarter-on-quarter) but grow 10% year-on-year largely aided by gRevlimid.
SAGA to grow 5% year-on-year as decline due to QCIL divestment to partly offset by Actor integration. As a result of softer India and US, expect EBITDA margin to be at 21%, resulting in 24% FY24 margin as per guidance
Motilal Oswal
The US sales clock 12% year-on-year growth to $228 million for 4QFY24 led by market share gains of existing products. Expect DF sales to grow 7% year-on-year, driven by improved uptake in respiratory, cardiac, and urology segments as well as gains in the market share.
Watch out for an update on the USFDA remediation measures at Goa and Pithampur facilities. Progress on g-Advair/g-Abraxane and other assets like peptides is a key monitorable.
Sharekhan
Sales growth expected due to pick up in the domestic branded market, One plus segment and easing of price erosion in the US market. Margins to decline sequentially due to lower gRevlimid sales and higher marketing spend.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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