Emkay Global Financial Services has downgraded Cipla to 'Hold' with price target of Rs 640.
 
"Cipla reported revenues at Rs 30.9 billion as against estimates of Rs 28.5 billion. Higher costs however kept overall margins and earnings subdued with reported EBITDA at Rs 5 billion (est. Rs 6.1 billion) and PAT at Rs 2.5 billion (est.3.7 billion). The company continues to be in an investment mode as a result of which higher R&D and SGA costs weighed on the quarter," Emkay Global said.

Commenting on the investment rationale, the stock broker said, ''We see subdued near term return ratios as Cipla builds out its product development and marketing reach across various markets.

Lower our rating to Hold from Accumulate with lower TP of Rs 640/share (earlier 690). Near term catalysts remains strong Q1FY16 profitability due to Nexium US launch.''

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