Timely new launches, India outperformance key for Cipla's margin gains

The stock of pharma major Cipla gained over 5.6 per cent on Monday and was among the top gainers in the BSE 100 Index. While the March quarter performance was slightly below estimates, the stock gains were on the back of multiple new launches, improved outlook, and higher margin guidance for financial year 2025. Revenues in the quarter were up 7 per cent year-on-year, while operating profit gained 12 per cent, missing Street estimates. Adjusted for one-off gains, the net profit was up 22 per cent and was boosted by higher other income and lower interest costs.Revenue was led by steady growth in the US market, which was up 12 per cent year-on-year. This was due to improved demand in peptides, respiratory products, and sales of the generic version of the cancer drug, Revlimid. The active pharmaceutical ingredients business led on the sales front with a growth of 42 per cent, while the domestic sales were up 7 per cent year-on-year. Sales growth for financial year 2024 was, however, strong at 13 per cent, while operating profit too was strong at 23 per cent. The performance was led by higher off-take in the US generics and better execution in the branded generic segment in the India and South African market.