Cipla stock edged up by 1.43 percent on March 2, nearing the 52-week high it reached in the previous session by just Rs 2.
The United States Food and Drug Administration (USFDA) conducted an inspection of Cipla (Jiangsu) Pharmaceutical’s manufacturing facility in Qidong, Jiangsu Province, China, from February 26 to March 1. Cipla announced that the inspection concluded with no Form 483 observations.
In a separate disclosure, the company informed the stock exchanges about the completion of the transfer of its generics business. “The company has finalized the transfer of Generics Business Undertaking as a going concern on a slump sale basis to Cipla Pharma and Life Sciences Limited, a wholly-owned subsidiary of the company on 1st March 2024,” stated Cipla.
This transaction is expected to enable the company to capitalize on the high-growth potential business by increasing investments in new launches, expanding penetration in Tier 2-6 towns/cities, and enhancing patient access through high-quality generic medicines, as stated earlier by the company. The stock has shown a 67 percent increase in the past year and over 6 percent growth in the past month.
Financial Highlights:
In the quarter ending December 31, 2023, Cipla reported a consolidated net profit of Rs 1,068.4 crore, marking a 32.25 percent increase compared to the same period in the previous year. Consolidated revenue stood at Rs 6,603.81 crore, up by 13.66 percent.
Brokerage Recommendation:
Nuvama Institutional Equities analysts expressed optimism about Cipla’s growth prospects beyond limited gRevlimid cash flow. They suggested, “Top-notch execution and consistent revenue warrant a premium valuation. Therefore, we are revising the core business multiple to 29x (from 27x). We are increasing FY24E EPS by 6 percent; FY25 remains largely unchanged. We rate it as ‘BUY’ with a target price of Rs 1,600 (previously Rs 1,350), along with a rollover to Dec-25E.”
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