Cipla disclosed a steep drop in standalone net profit for the quarter ended June 2014. During the quarter, the profit of the company declined 30.05% to Rs 3,321.70 million from Rs 4,749 million in the same quarter last year. Net sales for the quarter declined marginally 0.5% to Rs 24,744.60 million, compared with Rs 24,869.10 million for the prior year period.
Commenting on the result, Saion Mukherjee, analyst, Nomura, said, ''Cipla's 1QFY15 results were lower than our estimates. Domestic business growth at 17% y-y was impressive, but exports growth at 10%, despite a favourable currency tailwind, is disappointing, in our view. Management has retained its guidance of mid-teen revenue growth for FY15 (vs. 14% growth in 1QFY15).
''Cipla's 1QFY15 revenues and EBIDTA were in line with expectations. Earlier than expected (2HFY15) approvals for combination inhalers in EU markets (particularly large markets like France and Germany) remain an upside risk to our estimates,'' said, Meeta Shetty, HDFC securities Institutional Research.
Arvind Bothra, Religare Institutional, said, ''Cipla's Q1 PAT at Rs 2.9 billion fell sharply below RCMLe (Rs 3.6 billion) on a weak topline (3% below est.) and higher minority losses. We raise our TP to Rs 420 (from Rs 400) as we roll over to Sep'16E EPS. SELL on rich valuations; expect consensus EPS downgrades on margin miss.
Rahul Sharma, analyst, Karvy Stock Broking, ''Cipla's revenues rose 8.3%YoY to Rs 27.2 billion lower than our estimates of Rs 27.7 billion. We have increased our revenue estimates by 1% primarily on account of higher other operating income. We downgrade our EDBITA Margin by 50 bps to 20.3% for FY15E and by 60 bps to 21.4% for FY16E due to higher personnel cost. We have also increased our depreciation cost by 22% in lieu of revision in useful life of assets. We downgrade our EPS estimates by 13% to Rs 16 for FY15E and by 11.7% to Rs 20.7 for FY16E. We rate the stock as a Sell with a price target of Rs 435 based on 21x FY16E.''
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