Cipla Ltd Disappointment continues; Maintain Reduce :Emkay

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Cipla Ltd

Disappointment continues; Maintain Reduce

REDUCE

CMP: Rs303                                        Target Price: Rs283

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n     Cipla’s Q1FY12 results were below expectation with a) Revenues up 9% to Rs15.5bn b) EBITDA up 2% to Rs3.6bn and c) APAT down 11% to Rs2.4bn 

n     Subdued growth in revenues was mainly due to 8% growth in Exports which was led by 22% growth in API sales. Domestic business grew below industry rate at 10%

n     Acute segment witnessed intense competition from industry peers during the quarter. Respiratory segment continues to do well for the company

n     With increasing competition in domestic market, slow ramp-up in exports & higher overheads at Indore SEZ plant – we re-iterate reduce on the stock with a target price of Rs283 (16xFY13 EPS of Rs17.7)