Cipla results were below expectations, on net sales and OPM front, while net profit came in higher the expectations, on back of the higher than expected other income. For 3QFY2015, the sales, growth for 3QFY2015 came in tepid 2.8% yoy to end the period at Rs 26.25 billion v/s Rs 30.12 billion, expected and Rs 25.53 billion in 3QFY2014.
Commenting on the result, Sarabjit Kour Nangra, vice president Research - Pharma, Angel Broking said, "The domestic formulation (Rs 11.99 billion) grew by 14.2% yoy, while exports (Rs 14.26 billion) declined by 6.1% yoy. The dip in the exports was driven by the 6.3% and 4.4% yoy dip in the formulation and the API respectively. On the operating front, the OPM's came in at 15.7% v/s 16.8% expected v/s 17.2% in 3QFY2014, a yoy dip of 147bps, even though the GPM's came in at 62.3% v/s 61.3% expected v/s 60.9% in 3QFY2014.
This was mainly on back of a 25.5% rise in the employee expenditure, while buffered by the 0.7% yoy rise in other expenditure. Thus, the adj. net profit came in at Rs 3.28 billion v/s Rs 3.03 billion expected and Rs 2.84 billion in 3QFY2014, a yoy growth of 15.3%.The adjusted net profit during the period was, higher than expected on back of higher than expected other income. Other income during the quarter was Rs 1.81 billion v/s Rs 805 million during the last corresponding period. We maintain our neutral rating."
