CIPLA - Cipla Ltd. Share Price

Management Outlook for Cipla (Q3 FY25):
Cipla's management remains confident in its resilient, diversified business model, targeting sustained growth across key markets. Key highlights:

1. Growth Drivers:

• US Market: Focus on resolving supply issues (e.g., Lanreotide normalization by Q4 FY25) and accelerating launches from US facilities. Key pipeline assets include generic Advair (H1 FY26 launch), generic Abraxane (H2 FY26), and a partnered inhalation product. Respiratory portfolio (Albuterol, future launches) to offset Revlimid's decline.
• India Business: Strong 10% YoY growth in Q3; chronic therapies now 61.5% of prescriptions. Consumer health (e.g., Nicotex, Omnigel) and trade generics rebound. Focus on chronic care expansion and AI-driven innovations (e.g., CipAir app).
• International Markets:
  • One Africa: 9% USD growth (21% ZAR growth in South Africa); margin expansion focus.
  • EMEU: 20% USD growth; deepening penetration in key markets.

2. Financial Performance:

• Record quarterly revenue (Rs.7,073 Cr, +8% YoY) and all-time high EBITDA margin (28%).
• FY25 EBITDA margins expected to exceed prior guidance (24.5"“25.5%).
• Strong cash position (Rs.8,947 Cr net cash).

3. Regulatory & R&D:

• Goa facility cleared by US FDA (VAI). Virgonagar and Medispray inspections underway.
• R&D spend at 5% of revenue; pipeline includes respiratory, peptides, and oncology assets.

4. FY26 Guidance:

• Revenue growth expected; profitability guidance post-budget finalization.
• Focus on derisking US portfolio, margin sustainability, and strategic acquisitions.

Challenges: Pricing moderation in US generics, regulatory timelines for key launches (e.g., Abraxane), and seasonal volatility in India.

Question 1:
Saion Mukherjee (Nomura Securities): Could you provide details on the US revenue trajectory, including sequential trends for Revlimid, Advair, and Lanreotide, and the impact of delayed key product launches?
Answer: Revlimid revenue remained stable sequentially. Advair (generic) and Abraxane launches are delayed to H2 FY26 due to regulatory processes but are expected to offset Revlimid's decline. Lanreotide supply issues are resolving, with normalization expected by Q4 FY25.

Question 2:
Kunal Dhamesha (Macquarie): What is your outlook on potential US tariffs on pharmaceuticals and FY26 growth drivers beyond Advair/Abraxane?
Answer: Cipla's US manufacturing derisks tariff impacts. FY26 growth will rely on respiratory assets (e.g., Symbicort), peptides, and pipeline products. US pricing erosion remains stable (~high single digits).

Question 3:
Damayanti Kerai (HSBC): Can Albuterol gain further market share, and how is Lanreotide's supply recovery progressing?
Answer: Albuterol's pricing is stable; market share gains will moderate. Lanreotide supply is ~50% restored, with full recovery expected by March 2025. Capacity expansion could boost supply by 20"“25% post-recovery.

Question 4:
Neha Manpuria (Bank of America): Why is Abraxane's launch delayed to H2 FY26, and when will other 505(b)2/peptide assets launch?
Answer: Abraxane's delay stems from pending FDA approval and post-approval manufacturing readiness. Three peptide/505(b)2 assets are planned over 15 months, including FY26 launches.

Question 5:
Anubhav Agarwal (UBS): What is Lanreotide's supply outlook, and can the US respiratory portfolio double?
Answer: Lanreotide supply normalizes by March 2025, with potential incremental capacity post-remediation. Respiratory revenue (current ~$200M annually) could rise sharply via Advair, Symbicort, and partnered launches.

Question 6:
Bino Pathiparampil (Elara Capital): How competitive is Abraxane's market, and what drove South Africa's 21% growth?
Answer: Abraxane faces limited competition (1"“2 players), with moderate price erosion. South Africa grew via new launches, selective tenders, and private-market execution.

Question 7:
Chirag (DSP Asset Managers): How is Cipla addressing FDA compliance, and what are capital allocation plans?
Answer: Automation, talent training, and process improvements address quality issues. Cash (~Rs.8,947cr) will fund dividends (30% payout), acquisitions (India/US), and innovation.

Question 8:
Nitin Agarwal (DAM Capital): Is India's profitability higher than company average, and what's the Semaglutide launch plan?
Answer: India's profitability exceeds company average due to scale and productivity. Semaglutide launches in India are expected in 2026, targeting first-wave entry.

Question 9:
Harsh Bhatia (Bandhan MF): What drives Abraxane's 6-month post-approval timeline, and will FY26 Revlimid sales differ?
Answer: Post-approval batches and API testing delay Abraxane's launch. FY26 Revlimid sales will decline due to competition, offset by new launches.

Question 10:
Surya Patra (PhillipCapital): What is the injectables pipeline outlook?
Answer: Injectables focus on peptides (e.g., Lanreotide) and complex assets like Abraxane, with partnered general injectables contributing to the portfolio.