Cipla Q4 Net Profit Jumps 45% On Strong US Show

The company’s net profit however was impacted by one-time charges (impairment losses) worth ₹182.42 crore, pertaining to an acquisition in Uganda and its assets in Yemen.

Adjusted for the same, the company’s net profit stood at ₹708 crore during Q4. The company’s revenues at ₹5,739.3 crore grew 9% year-on-year during Q4. The growth was driven by the company's strong performance in the US while India business supported it.

The North America sales, contributing slightly less than a third to overall revenues, marked a strong growth of 39% year-on-year. In constant currency terms at $204 million, the US sales grew 27% YoY. Robust momentum continues in the differentiated portfolio and Lanreotide market share now stands at 17%, the company said. Lanreotide is a drug that regulates the production of hormones.

Its domestic business that contributes two-fifths to overall revenues reported a growth of 3% year-on-year. Adjusted for the covid treatment drug contributions, the growth was at 16%.

Weakness continues in South Africa and SAGA (South Africa, sub-Saharan Africa and Global Access) business that saw revenues decline 7% and 13% respectively. However, on a sequential basis there is improvement in supply and the South Africa and SAGA revenues were up 22% and 12%, respectively.

The emerging markets' sales (14% overall) remained impacted by currency volatility and grew 6% YoY, ex-covid, in rupee terms. The company’s reported Ebitda at ₹1,174 crore during Q4 which grew 54% year-on-year and margins improved 596 basis points to 20.5%. Ebitda stands for earnings before interest tax depreciation and amortisation.

During FY23, the company’s revenues at ₹22,753 crore grew 11% year-on-year. The reported net profit at ₹2,802 crore and adjusted net profit at ₹2,984 crore grew 11% each over FY22. The reported Ebitda at ₹5,027 crore grew 10% year-on-year while margins expanded to 22.1% in FY23 over 21% in FY22.

Umang Vohra, managing director and Global CEO of Cipla Ltd, said, "Adjusting for covid, our core operating profitability continues to be strong at 23% (during FY23) expanding by 100 bps over last year. We are excited for the upcoming year, where we look forward to deepening our leadership in branded markets and expanding our differentiated pipeline in the US."

Vohra expects adjusted Ebitda margins to remain at 23% or more during FY24. He also expects to maintain the quarterly run rate of $195-200 million in revenues from the US markets. While growth momentum in the US remains strong, the launches of two key respiratory products, the generics of Advair and Abraxane remain much awaited. The launches, however, hinge on the regulatory clearances for the company’s Indore and Goa manufacturing facilities, by the USFDA.

The outcome of inspections at the Indore unit is expected very soon and if the USFDA clears the plant, launch of Advair generics may happen in the ongoing quarter itself. However, if the company fails to get clearance for Indore unit soon, the launch of Advair generics can get delayed by a year also as company may have to opt for site transfer and the USFDA needs to approve the launch of Advair generics from alternative manufacturing facility that is compliant with FDA’s current good manufacturing practices (CGMP) requirements.

However, for Abraxane generics the company already has filed for site transfer from the Goa facility to a partner's site and the launch may thereby happen by the second half of FY24.