CIPLA Q3 2024-2025 Call Highlights: EBITDA Growth, Launch Delays, & Market Strategies!

Cipla Ltd., a leading pharmaceutical company from India that manufactures and distributes branded medicines, generics and active pharmaceutical ingredients across the globe, in its Q3 earnings call acknowledged delays in US launches like Advair and Abraxane to H2 FY26, while Revlimid sales stayed stable. The company discussed mitigating tariff risks with US manufacturing and forecasted growth in its respiratory portfolio with upcoming launches. Lanreotide supply capacity is expected to normalize by March, with potential for further expansion. In South Africa, performance was strong due to new product introductions and strategic tender participation. Cipla maintained its tax rate guidance and clarified that while Q3’s 28% EBITDA margin was exceptional, it’s not expected long-term, though the company aims to exceed annual margin goals.

Cipla demonstrated a robust financial performance, with revenue increasing by 7% and EBITDA up by 16%. The standout was a 47% jump in net profit, far exceeding analyst expectations. Despite a minor 2% drop in the US market to $226 million due to supply issues, Cipla saw significant growth in other regions with One India and One Africa operations growing by 10% and the Emerging Markets & Europe (EMEU) segment by 22%. The company achieved record gross margins of 68% and a net cash position of INR8,947 crore, though it faced challenges like USFDA observations at its Bengaluru facility and potential sustainability issues with its high EBITDA margins of 28%. Looking forward, Cipla anticipates surpassing its annual margin guidance and has plans for significant product launches in the next fiscal year.

Continue Reading: Discover the Vital Insights from Cipla Ltd.’s Earnings Call!

Financial/Operational Metrics:

• Total Revenue: INR7,295 crore, up7.4% YoY.
• Net Profit: INR1,575 crore, up 47.4% YoY.
• Diluted EPS: INR19.45, up 48.7% YoY.
• Total Expense: INR5,378 crore, up 5% YoY.
• EBITDA: INR1,989 crore, up 16% YoY.

Outlook:

• Planned Launches: Generic Advair, H1 FY’26 and Generic Abraxane, H2 FY’26 (Goa facility).
• R&D Guidance: 5-6% of revenue.
• EBITDA Guidance: Trending above prior 24.5%-25.5% estimate.

 

Analyst Crossfire:

• US Revenue Trajectory, Key Product Launches & President’s Emergency Plan for AIDS Relief (PEPFAR) Impact (Saion Mukherjee – Nomura Securities): Revlimid revenue remained stable sequentially. Advair is yet to launch (expected in H2 FY’26), while Abraxane is slated for late next year, pending regulatory clearance. These assets, along with a partnered inhalation product, are expected to partially offset Revlimid’s contribution. Cipla’s exposure to PEPFAR is minimal, with less than $1 million in sales at negligible margins, meaning no significant financial impact (Umang Vohra – MD & Global CEO).

 

• US Tariff Policy Impact, FY’26 Growth & US Pricing Erosion (Kunal Dhamesha – Macquarie): Cipla awaits formal policy details but is well-hedged against potential tariff risks, given its US-based manufacturing facilities, which mitigate dependency on Indian exports. US pricing erosion remains stable across retail, institutional, and government channels. Beyond Advair and Abraxane, Cipla has additional respiratory and peptide assets in the pipeline for FY’26 (Umang Vohra – MD & Global CEO).

 

• Albuterol Market Share & Pricing, Lanreotide Supply Normalization (Damayanti Kerai – HSBC): Market share has surpassed 21% with stable pricing. Further growth potential exists, but future market share gains will be moderate due to supply limitations. Supply is expected to return to normal by March-end, with a ramp-up in Q1 FY’26. Cipla is working with its partner to bring full capacity online (Umang Vohra – MD & Global CEO).

 

• Trade Generics Growth & EBITDA Margin Expansion (Neha Manpuria – Bank of America, Ankush Mahajan – Axis Securities): Growth has moderated due to lower pricing impact in the market and seasonal slowdowns. However, trade generics remain on track, slightly outpacing branded sales. Strong Q3 margins were driven by product mix and respiratory portfolio performance. Q4 is seasonally weaker, but FY’25 EBITDA is expected to exceed prior guidance of 25.5% (Umang Vohra – MD & Global CEO, Ashish Adukia – Global CFO).

 

• Capital Allocation Strategy & Oligonucleotide Pipeline (Chirag – DSP Asset Managers, Abdulkader Puranwala – ICICI): Cipla plans to use its INR9,000 crore cash reserve for dividend growth, acquisitions (both companies and products), and innovation investments in India, the US, and other global markets. Cipla is planning to file Oligonucleotide products within three to five years, with launches expected in the longer term (Ashish Adukia – Global CFO).

 

• Semaglutide Launch & India Business Growth, Revlimid Sales Outlook (Umesh Laddha – Nirmal Bang, Harsh Bhatia – Bandhan MF): Cipla expects the Semaglutide market to form in 2026 and aims to be an early entrant. India business growth of 10% YoY was driven by 2% volume growth, with the rest from pricing and new introductions. Increased competition will alter Revlimid’s sales trajectory in FY’26 compared to FY’25 (Umang Vohra – MD & Global CEO, Ashish Adukia – Global CFO).

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