Cipla’s profit fell by more than a third, missing estimates. Its Indian business had a record quarter, but lower US revenue and narrower margins dragged down overall earnings.
Cipla reported consolidated net profit of ₹878 crore for the September quarter, down 35% from ₹1,351 crore a year earlier and below analyst estimates of about ₹950 crore. Revenue from operations fell 2.4% to ₹7,404 crore. EBITDA fell 27% to ₹1,388 crore, and the EBITDA margin narrowed to 18.7% from 25.0%.
The result contrasts with Mankind Pharma, which reported a 38% profit increase on Monday, and shows how differently Indian drugmakers are performing this season.
US business weaker
The main drag was North America, where Cipla sells generic medicines. North American revenue was $172 million, about 22% of total revenue. That was $10 million higher than the June quarter but below last year’s level. Cipla had benefited from some higher-margin US products in previous years, and their contribution has fallen as competition increased and prices dropped.
There is a positive development in the US. Cipla received FDA approval for a generic version of Advair Diskus, a widely used asthma and COPD inhaler, in all three strengths. Complex inhalers are hard to copy, so generic versions face less competition and earn better margins. The launch could help US revenue recover over the next few quarters.
India business at a record
The domestic business was strong. One India, Cipla’s Indian business, recorded its highest-ever quarterly revenue of ₹3,516 crore, up 12% from a year earlier and 48% of total revenue. Cipla said it remains second in India’s chronic therapy market, the segment for long-term conditions such as respiratory disease, heart disease and diabetes, which provides steady, repeat revenue.
Africa was mixed. South Africa’s prescription business grew 9.9%, faster than the market, but tender sales, where governments buy medicines in bulk, fell to $12 million from $23 million.
Guidance unchanged
Cipla kept its full-year EBITDA margin guidance of 18.5–20%. This quarter’s margin was at the lower end of that range, so management expects margins to hold at around this level rather than recover quickly. The company also launched six new products in the quarter.
Cipla’s balance sheet is strong, with net cash of ₹9,823 crore. That gives it room for acquisitions or major investments without borrowing.
Indian pharmaceutical results this season are divided. Companies focused on the domestic market and on chronic therapies, such as Mankind, are growing strongly. Companies that depend more on US generics face falling prices and more competition. Cipla has both businesses, and this quarter the US weakness outweighed the domestic strength.
Recovery depends largely on the US inhaler launches, particularly generic Advair. If those gain market share, Cipla’s US business could grow again next year. Until then, the Indian business will have to carry more of the company’s growth.
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