CIPLA - Result Analysis Q1 FY21
CMP: 779 (As on 11-08-2020)
Total income from operations 4,346 Cr
3,989 Cr (8.91%) YoY | 4,376 Cr (-0.68%) QoQ
Year ending revenue: 17,476 Cr Vs. 16,362 Cr (6.80%)
Net Profit of 566 Cr
447 Cr (26.61%) YoY 239 Cr (136.83%) QoQ
Year ending Net profit: 1,547 Cr Vs. 1,528 Cr (1.24%)
EPS (in Rs.) 7.16
5.93 YoY | 3.05 QoQ
Year ending EPS: 19.16 Vs. 18.96
View:
Result is overall good and improved. YoY revenue up and profit also up.
Profit also increased in QoQ. EBITDA and margin also improved in this
quarter.
Business Updates & Highlights
Q1FY21
EBITDA is around INR 1,049 Cr Vs. 905 Cr in Q1FY20 Vs. 652 Cr in Q4FY20
therefore up by 24% in YoY and 61% in QoQ. EBITDA margin in Q1FY21 was
24.1% Vs. 22.7% in Q1FY20 Vs. 14.9% in QoQ. EBITDA margin is improved in
145 bps in YoY and 923 bps in QoQ.
Company is primarily operating into five main geographical segments which are as under:
North America
Cipla
North America sales for Q1 FY2021 were INR 1,021 Cr Vs. 1,119 Cr in
Q1FY20 VS. 856 Cr in Q4FY20 therefore declined by 9% in YoY and up by
19% in QoQ. North America contributed 23% of total sales.
India
India
sales (Rx+Gx+CHL) for Q1 FY2021 was INR 1,608 Cr Vs. 1,388 Cr in Q1FY20
Vs. 1,730 Cr in Q4FY20 therefore up by 16% in YoY and declined by 7% in
QoQ. India contributed 37% of total sales.
SAGA (including
South Africa Animal health) in Q1FY21 was INR 763 Cr Vs. 691 Cr in
Q1FY20 Vs. 825 Cr in Q4FY20 therefore up by 10% in YoY and declined by
8% in QoQ. SAGA contributed 18% of total sales.
Global API
Cipla
API sales for Q1 FY2021 was INR 184 Cr Vs. 182 Cr in Q1FY20 Vs. 247 Cr
in Q4FY20 therefore up by 1% in YoY and declined by 25% in QoQ. API
contributed nearly 4% of total sales.
Emerging Markets
Cipla
emerging market sales for Q1FY21 was around INR 457 Cr Vs. 279 Cr in
Q1FY20 Vs. 415 Cr in Q4FY20 therefore up by 64% in YoY and 10% in QoQ.
Europe
Europe
contributed sales in Q1FY21 was around INR 240 Cr Vs. 201 Cr in Q1FY20
Vs. 232 Cr in Q4FY20 therefore up by 19% in YoY and 3% in QoQ.
Other expenditure declined by 17% in YoY and 27% in QoQ.
The
Rx business grew 9% YoY led by strong traction in chronic therapies
despite lock down challenges; continued servicing of patients with Covid
portfolio
Pipeline Update
Launched dihydroergotamine mesylate nasal spray with 180 day of CGT exclusivity.
Launch of Icatibant injectable pre-filled syringe
US Specialty CNS Out-licensing: Actively exploring partnerships for the other CNS asset.
R&D investments stand at INR 200 crores or 4.6 % of revenue
Financial
ROE
and ROCE is around 10% and 12% respectively and book value per share is
around INR 196 and share is currently trading at 3.7x of its book
value. Company is currently trading at annualized PE of around 33 which
is good as per Industry benchmark. Promoter holding in the company is
around 36.7% which is low but stable. FIIs, mutual fund and insurance
cos hold around 18.6%, 16,3% and 4.6% respectively. Total debt as of
June 2020 was around INR 3,206 Cr Vs. 2,816 Cr in March 2020. Cash &
cash equivalent as of June 2020 was around 3,256 Cr VS. 2,009 Cr in
March 2020.
Position: Share strong support price is INR 690.
Long term investor should continue with the company and any correction
will give good opportunity to enter in SIP basis in long term.
Share
View: Share price high 740 (52 week) and now 728. Cipla is a global
pharmaceutical company focused on agile and sustainable growth, complex
generics, and deepening portfolio in home markets of India, South
Africa, North America, and key regulated and emerging markets.
Opportunities
Cipla
enjoy 2nd rank overall in Chronic segment with 7.4% market share and
growth 7% in YoY. Respiratory therapy 1st rank overall with 25.7% market
share with 5% growth. Inhalation therapy 1st rank overall with 68.9%
market share with 6% growth. Urology therapy 1st rank overall with 16.3%
market share with 5% growth. Cardiology 1st rank overall with 5.5%
market with 10% growth. Outperformed the market in Respiratory,
Inhalation and Urology while Cardiology reported strong double digit
growth. Significant net cash addition through focus on cash conservation
and liquidity management. Accelerated launch of the largest Covid-19
portfolio in the country ▪ Cipremi® (Remdesivir) ▪ Actemra® (Toclizumab)
▪ Ciplenza® (Favipiravir) ▪ Ciphands® (Hand Sanitizer) received good
response also. India Rx 4th consecutive quarter of market beating
growth. Strong product portfolio and enjoy the brand image and
reputation.
Risk
Observations received in one of major
plant in Goa location. Very low Return on equity (ROE) and in past 10
year average it was around 11% and further sales and profit growth was
also single digit.
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cause actual events to differ materially from those expressed or implied in
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due care has been exercised while preparing this document, we do not warrant
the completeness or accuracy of the information. We will not accept any
liability arising from the use of this material. The recipient of this material
should rely on their investigations and take their own professional advice.
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