Buy Cipla between Rs 677.65 & Rs 625 :: HDFC Securities

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Cipla Medpro wins R2bn (Rs10.8bn) of state ARV Tender; Raise PT to Rs644 (from Rs632) maintain HOLD :: IndiaNivesh

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ARV tender to drive growth - Buy Cipla :: Centrum

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Kotak Sec, Cipla: Lower allocations in 2014 ARV tender

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Cipla (2QFY15) : Dismal quarter, guidance maintained. Maintain BUY :: HDFC Sec, link

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Cipla - Product rationalisation hampers growth…:: ICICI Securities, PDF link

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Cipla Ltd.|Q2FY15 Result Update | Q2FY15 – weak quarter, an aberration; outlook remains promising :: IndiaNivesh

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Aurobindo Pharma and Cipla :: IndiaNivesh PDF link

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Aurobindo Pharma and Cipla
Newsflash: MPP announced six new sub-licences with Aurobindo Pharma, Cipla,
Desano, Emcure, Hetero Labs and Laurus Labs to allow generic manufacturing of
TAF for 112 developing countries. The generic companies will begin development
plans for new HIV product simultaneous with USFDA’s review to expedite access to
low and middle-income countries once the medicine is approved. In studies, TAF
has demonstrated comparable antiviral efficacy to that of 300 milligram tenofovir
disoproxil fumarate (TDF) – a World Health Organization-preferred HIV therapy –
but at a dose that is 10 times lower. The smaller milligram dose may also allow
lower production costs, as well as greater ease in developing new fixed-dose
combinations and single tablet regimens.
Our view: TAF, once approved, would be one more product under tender business
for HIV drugs. Participation of Aurobindo Pharma and Cipla in this drug would depend
on the profitability from this drug, given the past history of both the companies of
prioritising profitability over revenues. The potential consumption of this product
remains promising given the small amount of dosage required. Gilead, the innovator,
has just released the positive results on two of its TAF Phase III studies. Post results
and development by generic players, we expect meaningful revenue and profitability
to accrue 12-18 months from now.
The global sales of branded TDF – Viread has been US$958mn for CY13, as per
annual report of Gilead.
Impact on Stock:
Since the product is in development stage, we expect it to have no financial impact
as of now, however, it would be sentiment positive on Aurobindo Pharma and Cipla.


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Cipla - Combination inhalers to drive growth :: Centrum

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Rating: Buy; Target Price: Rs730; CMP: Rs613; Upside: 19.1%



Combination inhalers to drive growth



We reiterate Buy rating on Cipla with a revised target price of Rs730
(earlier Rs540) based on 24xSept’16E EPS of Rs30.3. The launch of
combination inhalers in various global markets is a positive step. The
licensing agreement with Gilead, US for its Hepatitis C drug for 91
countries will drive growth. Acquisition of two manufacturing
facilities will yield operational synergies. All these initiatives are
likely to bear fruit. We have revised the earning multiple from 22x to
24x based on these developments. Key risks to our assumptions include
slowdown in global generic business and regulatory risks for its
manufacturing facilities.

$ Combination inhalers to drive growth: Cipla has recently launched
its salmeterol/ fluticasone combination inhaler under the brand name
‘Serroflo’ in Germany and salmeterol/fluticasone Cipla in Sweden. The
inhaler is available in Croatia under the brand name Duohal. The
company has entered into commercial collaboration with S & D pharma
for inhalers under the brand name Fulhale in Czech Republic and
Slovakia. We expect the inhalers to generate revenues of $27mn in
FY15, $45mn in FY16 and $62mn in FY17 from these four countries
namely, Germany, Sweden, Czech Republic and Slovakia. Cipla will have
its own field force in Czech Republic and Slovakia. We expect the
company to benefit immensely from these launches.

$ Agreement with Gilead, US for Hepatitis C drugs: Cipla has entered
into non-exclusive licensing agreement with Gilead, US for the
manufacture and distribution of its Hepatitis C drugs Sofosbuvir and
Ledipasvir in 91 countries under its own brand. The agreement covers
over 100mn patients out of a global population of 130-150mn patients.
India has over 10-20mn Hepatitis C patients, more than HIV/AIDS
patients. Cipla will receive technology transfer and manufacturing
processes from Gilead and will market the drugs at competitive prices
globally. We expect Cipla to generate revenues of $5mn in FY15, $7mn
in FY16 and $10mn in FY17 from the manufacture and marketing of these
drugs.

$ Acquisition of manufacturing facilities to yield synergies: Cipla’s
100% subsidiary Medispray Labs Pvt. Ltd. has acquired two
manufacturing facilities from Osaka Pharma Pvt. Ltd., which were
dedicated to Cipla’s products. These facilities located at Goa and
Sangli were acquired for Rs290mn and Rs719mn respectively. The
acquisition is likely to lead to better control and yield operational
synergies. Cipla has entered into agreement with Salix Pharma, US for
granting exclusive rights for “Rifaximin complexes’ patent
applications. We expect Cipla to receive $5mn upfront payment in FY15
and $2mn and $3mn as royalties on sales in FY16 and FY17 respectively.

$ Recommendation and key risks: We maintain Buy rating for Cipla with
revised target price of Rs730 based on 24x Sept’16E EPS of Rs30.3 with
an upside of 19.1% from CMP. Cipla has launched its combination
inhalers in various global markets. It has tied up with Gilead, US for
the manufacture and marketing of its Hepatitis C drug in 91 countries.
With a strong product pipeline for the global market and good growth
in the domestic market, we expect the company to perform well from
FY16 onwards. We have revised our FY15 and FY16 EPS estimates upwards
by 15% and 17% respectively. Key risks to our assumptions include
slowdown in global generic business and regulatory risks for its
manufacturing facilities catering to global markets.



Thanks & Regards

--



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Cipla - Company Update - Margin impacted due to acquisition: Centrum

Rating: Buy; Target Price: Rs540; CMP: Rs382; Upside:41.5%



Margin impacted due to acquisition

We maintain Buy rating for Cipla with a price target of Rs540 from
Rs585 due to the fall in margins on consolidation of Medpro business.
On a consolidated basis, Cipla reported 13%YoY growth in revenues,
920bps decline in EBIDTA margin and 27% drop in net profit. Cipla has
established front end capability in the US and also enhanced its R & D
spend. We have revised our FY14 and FY15 EPS estimates downwards by 5%
and 13% respectively. Our target price is based on 22x Sept’15 EPS of
Rs24.5. Key risks to our estimates are slowdown of the domestic pharma
market and lower demand for the company’s products.

Technicals - Cipla, Arvind, Hindalco, Karur Vysya Bank, IOC:: Business Line

CLSA upgrades Cipla to OPF, Tgt 470 from 400

CLSA upgrades Cipla to OPF, Tgt 470Cipla 1QFY14 results were higher than expectations with net sales growth of
20%+ as both exports formulations (28% YoY) and domestic (17%) performed well. Notwithstanding sharp rise in staff costs (29% QoQ), Ebitda margins recovered 390bps QoQ but down YoY due to high margin product in the base. Milestone payment from partner Meda boosted other income resulting in substantial beat to our profit estimates. We have raised our estimates by 3-5% due to operational beat as well as inclusion of Medpro acquisition. With valuations at median level, we upgrade to O-PF. Target Rs 470 from Rs 400

Cipla Weak quarter, outlook intact; Buy :: Anand Rathi

Key takeaways
Muted quarter. Cipla’s 4QFY13 revenue grew 5.4% yoy to `19.7bn, less than
our expected `20.9bn, chiefly due to lower domestic growth and a decline in
APIs. Its EBITDA margin declined 60bps yoy to 20.8%, less than our
estimated 23.8%, on lower domestic revenue and a 300-bp yoy increase in staff
costs. Adjusted PAT fell 8.3% yoy to `2.7bn (vs our expected `3.5bn) on the
lower revenue growth, EBITDA margin decline and a higher effective tax rate.
Export formulations – key growth driver. Revenue growth at 5.4% yoy
was restrained. Export formulations was the key growth driver, with a 12%
yoy increase in revenue led by the anti-asthma, anti-allergy, ARVs and antidepressant
segments. However, on the high base, export API revenue fell
24% yoy. Domestic formulations registered 5.2% yoy growth, much less than
our estimated 10% due to the slowdown in industry growth particularly in the
acute segments.
Our take. We believe that the weak performance chiefly stemmed from
restrained growth in domestic formulations and the shift of some tender
business in Africa to FY14. This also cut into the margin. Management is
confident of healthy double-digit growth in FY14 and has guided to more
R&D expenditure to build a future pipeline. Considering 4QFY13’s subdued
performance, the 100-bp rise in R&D spend and the higher tax rate, we lower
our FY14e and FY15e revenue 1.6% and 0.3% respectively, and adjusted
PAT estimates 5.7% and 5.3%. The Cipla Medpro acquisition is expected to
be complete by 2QFY14 and we expect it to be 3.5% EPS accretive in FY15.
We have not factored this acquisition into our estimates but have valued it
separately.
We maintain a Buy on the stock, with a revised target of `472 based on 21x
Sep’14e earnings and `17 for the Cipla Medpro acquisition. Risks. Currency
fluctuations, regulatory hurdles.

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Cipla (CIPL.BO) Inline 3Q; Raise TP to 405  :: Citi Research

Cipla (CIPL.BO)
Inline 3Q; Raise TP to 405
 Maintain Neutral — 3Q was broadly in line (a tad below consensus), with a higherthan-
expected effective tax rate (a trend seen across the sector) being the only
surprise. With contribution from Lexpro exclusivity tapering off, 3Q is reasonably
close to Cipla’s true, sustainable earnings / margins, in our view. We raise our TP to
Rs405 (Rs390 earlier) as we roll over to June’14E (March ’14E earlier). Lupin,
Wockhardt & Glenmark are our top picks in the sector.
 Key To Note — a) Dymista: supplies initiated to Meda, to ramp up gradually on pick
up in US sales & EU launch; b) Base biz EBIDTA margins to be in the c22% range,
with some upside from unique opportunities from time to time; c) Cipla Medpro offer:
no final decision yet in light of change in biz/market conditions & management; d)
looking for small-medium front ends in emerging markets (Turkey, Latam, etc.); e)
ANDAs: 76 approved (>60% marketed) & 28 pending (incl. five own filings).
 3Q Snapshot — Net profit (+26% YoY) was in line/6% lower vis-à-vis
Citi/consensus estimates on higher effective tax rate. Revenues (+18%) were
steady & EBIDTA margin normalized (23.8%, +154bps YoY, -708bps QoQ), as the
Lexapro exclusivity boost tapered off. RM/Sales improved (better mix) but was
offset by higher staff cost (new hires, annual bonus) & overheads. Forex gain
(Rs190m) gave a small boost.
 Exports Strong, India Muted — The momentum in formulation exports (+38%)
continued, aided by the weaker INR. India (+10%) was muted in line with most of
the market but Cipla expects to end the year with c15%+ growth. API exports
declined (-16%) on the high base of 3QFY12 (one-off supplies).
 Other Earnings Call Takeaways — a) Capex guidance: cRs6.7bn in FY13, Rs3-
4bn in FY14; b) Indore SEZ sales to pick up in 4Q; to end the year with Rs6bn
(Rs4bn in 9m) as supplies to US pick up; c) Forward contracts of US$210m; d)
Effective tax rate to remain c24-25% for the next 2-3 years; f) R&D spend to move
up: c5% of sales (vs. c4% earlier).

Cipla (Rs 391.2): SELL ::Business Line

Cipla Ltd - HOLD:: Business Line

Technicals: Alok Ind, Hexaware, Cipla, NTPC, Jaiprakash Associates, Lakshmi Vilas Bank, Karur Vysya Bank :: Business Line

Cipla - US court ruled against Cipla; negligible impact: Edelweiss PDF link

The US Federal Circuit has upheld the District Court ruling against Cipla who have allegedly infringed a patent held by Merial Limited. Affirming the decision of District Court, the judge has rejected Cipla’s arguments and found that Cipla and its partner have infringed the patent. Though this development will be negative for Cipla (looking options to appeal in higher court), however the financial impact of the same will be immaterial (USD15-20mn).

Angel Broking - Cipla - RU4QFY2012- Result Updates ::PDF link

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Cipla - RU4QFY2012