Shares of Cipla, India’s leading pharmaceutical company, were under pressure on Tuesday, January 28, falling by 1% to ₹1,381.25 on the NSE in the morning trade, just ahead of the company’s December quarter results announcement. Cipla’s performance for the September quarter FY25 had shown a strong financial trajectory, but analysts are now awaiting the company’s latest earnings update.
For the second quarter, Cipla reported a 17% increase in consolidated net profit to ₹1,303 crore, compared to ₹1,115 crore in Q2 FY24, driven by robust sales across its global markets. Its total income from operations grew to ₹7,051 crore, up from ₹6,490 crore in the same quarter last year. The company’s EBITDA margin reached an all-time high of 26.7% in Q2, attributed to a favorable product mix and operational efficiencies. Despite this, Cipla’s ‘One-India’ business experienced a slowdown due to a shift in seasonal patterns. However, the company’s chronic therapy products continued to grow faster than the market, signaling a resilient core business.
In terms of regional performance, Cipla’s consumer health business grew by 21% YoY, and its US business posted a solid revenue of $237 million. In South Africa, the company saw an impressive 22% YoY growth in local currency terms, primarily driven by the private market. Additionally, Cipla’s Emerging Markets and Europe delivered robust growth of 18%, backed by a deep market focus strategy. Moving forward, Cipla’s focus will be on expanding in key markets, building flagship brands, investing in future pipelines, and addressing regulatory concerns.
Key Developments from Cipla
- Mobile App Launch: In early January 2025, Cipla launched a mobile app, CipAir, designed to help in the screening of asthma in India. This app aims to use next-gen technologies to improve asthma diagnostics and management, a significant step given the high burden of asthma in India. According to the Global Burden of Disease report, India has a much higher asthma-related mortality and disability rate compared to the global average. The app will first be available on Android, with plans to launch on iOS later.
- Afrezza Inhalation Powder Approval: In December 2024, Cipla received approval from the Central Drugs Standard Control Organisation (CDSCO) to market and distribute Afrezza inhalation powder in India. Afrezza, a rapid-acting insulin inhaler, is designed for adult patients with diabetes mellitus and presents an alternative to traditional insulin injections.
- Promoter Stake Sale: Cipla also made headlines in December 2024 when Samina Hamied and Rumana Hamied, members of the promoter family, sold their 1.72% stake in the company for ₹2,111 crore. This sale reduced the combined promoter group’s stake in Cipla to 29.2% from 30.92%. New investors such as the Singapore government, Societe Generale, and BNP Paribas bought into the company, signaling continued investor interest.
- GST Fine: In another setback, Cipla was fined ₹1.11 crore by the GST authority in December 2024 over an alleged inadmissible credit claim. The company is facing a penalty under the Central Goods and Services Tax Act, 2017 for availing ineligible TRAN-1 credit, with recovery orders for the fine, interest, and penalty in place.
Despite these mixed developments, Cipla’s shares have gained nearly 4% over the past 12 months, signaling investor confidence in the company’s long-term growth prospects. However, with its Q3 FY25 results around the corner, market participants will be watching closely for updates on Cipla’s profitability and outlook for the next quarter.