Reduce Cipla Ltd for the Target Rs. 1,350 by Choice Institutional Equities
Key Conference Call Highlights
India Business:
* Added 4 new brands to the INR 100+ Cr club, taking the total to 33 brands.
* Chronic therapies including respiratory, anti-diabetes, cardiac and urology continued to witness strong double-digit growth; chronic mix stood at 60%.
* Strategic initiatives included partnership with Eli Lilly for Yurpeak (obesity segment), launch of Afrezza (India’s first inhaled insulin), acquisition of Inzpera Healthcare and exclusive rights for select Pfizer brands.
* Management remains confident of delivering double-digit growth in India business in FY27E.
North America Business:
* Received approval for first AB-rated generic Ventolin from the US facility; launch expected in the next few months, with 6-month exclusivity opportunity.
* Pipeline visibility strengthened with 40–50 products planned in next three years, including 12 first-to-file opportunities.
* Four respiratory assets likely to be commercialised in FY27E, while additional filings in peptides, complex generics and biosimilars remain on track.
* Lanreotide continued to face supply disruption due to partner facility remediation; alternative US-based manufacturer identified to derisk supply with filing targeted by early CY2027.
* Management targets USD 1 Bn exit run-rate in FY27E, supported by respiratory launches and peptide opportunity.
One Africa Business and EMEU
* The focus for FY27E will be on improving the private market mix while correcting the contribution from the tender business in South Africa.
* The EMEU business crossed the USD 400 Mn revenue mark for the full year, becoming a meaningful business unit despite significant geopolitical volatility.
Outlook:
* FY27E EBITDA margin guided at 18.5%–20%, with sequential improvement and H2FY27 projected to be materially better than H1FY27.
* Margin guidance excludes contribution from Lanreotide and reflects continued investments in R&D, manufacturing readiness and talent addition.
* Biosimilars, peptides and respiratory portfolio are anticipated to emerge as key long-term growth drivers.
* R&D spend is projected to be 7% of revenue in FY27E.
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