Cipla Stock Falls After Fresh Concerns here’s what brokerages say

Cipla shares dropped on Friday as brokerages flagged supply disruption risks on its key US product, Lanreotide, amid rising competition in other generics. The stock is trading at Rs.1384.6 at the time of writing, a 3.48 per cent fall from the opening price.

Stock Performance
In the past year, the stock shed nearly 4 per cent, underperforming Nifty 50. In the last month, the stock fell by nearly 7 percent, and last week it was around 3.5 percent.

The decline was essentially due to the company's disclosure about the Lanreotide that the company has temporarily halted the manufacturing of the product, as its European manufacturing partner needs to fix issues raised by the US drug regulator (USFDA). Lanreotide is a big product for Cipla in the US – it brings in about $150 million every year and gives the company a 22% share of the market for that drug. Since it is one of Cipla's top three products in America, investors are worried that stopping production, even temporarily, could hurt the company's earnings and market position.

Brokerages' View
Morgan Stanley reiterated its underweight stance on the stock and reduced its target price to Rs.1292 per share. The brokerage flags concerns over the phase-out of Revlimid and supply disruptions in Lanreotide that could likely reflect in the performance of the company, especially in Q4 FY2026.

The brokerage has reduced the earnings outlook by 2 per cent for FY 2026 and 1 per cent for FY 2027, warning that any lingering disruption could lead to market share loss and downside risk to earnings in FY 2027 and FY 2028.

The brokerage Nuvama has also become more cautious about the stock, downgrading the rating to "Reduce" and cutting the target price to Rs. 1,360 per share. The brokerage noted that Cipla's special rights to sell the generic cancer drug gRevlimid have ended, uncertainty over the supply of another key drug Lanreotide persists, and competition is rising as another company, Lannett, recently got approval for a generic version of Advair. On top of this, Cipla's European manufacturing partner, Pharmathen, has stopped production and is expected to resume it only in the first half of FY27. Brokerage believes that disruptions could result in short-term uncertainty and slow earnings growth.

However, not all the brokerages are bearish. Nomura has maintained a Buy rating with a target price of Rs.1770. The brokerage said that the stock has already fallen about 6.5 per cent since the issue of lanreotide, and the issue has already been reflected in the price.

Company Response
Cipla confirms that production of lanreotide has been disrupted because of the closure of its partner's plant in Greece, as they have been resolving the issues flagged by the US drug regulator. The company expects supplies to restart in the first half of FY27 and says it is keeping a close watch on stock levels.