Pharma Stock To Buy: ICICI Securities Upgrades Target Price To Rs 1365, Q2 Net Up 43.3%

ICICI Securities has recommended investors to buy large cap pharmaceuticals sector stock Cipla Ltd with target price of Rs 1365 per share. Last trading price of Cipla share on BSE is Rs 1198.85 per share with intraday gain of 2.59%. The company has a market capitalisation of Rs 96,786.21 crore. If you buy Cipla share at last trading price of Rs 1198.85 per share, you can get likely return of 13.86%.

Cipla continues to surprise us positively. Q2FY24 growth was led by core markets of India (up 10% YoY), US (~4% QoQ) and South Africa (15% YoY). Price hikes in key markets and softer RM cost aided 243bps YoY rise in gross margin to 65.4%. Operating leverage further lifted EBITDA margin by 362bps YoY to a record 26%, said the analyst.

Cipla Stock Outlook & Return: Last trading price of Cipla share BSE is Rs 1198.85 apiece. Its 52-week high price is Rs 1283.00 per share and 52-week low price is Rs 852.00 per share, respectively. Its market capitalisation is Rs 96,786.21 crore. Cipla shares offered shareholders return of 27% in last 6-months, gained over 9% in last 1-year, and soared 60% in last 3-years. In last 5-years, Cipla shares surged 132%.

Cipla Valuation: According to the analyst, "Better performance in key geographies of US and India may aid a revenue CAGR of 13.7% over FY23-25E while EBITDA and PAT may grow at 22%/27.6% over FY23-25E. At CMP of INR 1,174, the stock currently trades at valuations of 23.9x FY24E and 19.9x FY25E earnings and EV/EBITDA multiples of 13.8x FY24E and 11.3x FY25E. We retain BUY rating on the stock with higher target price of INR 1,365 (from INR 1,300), valuing the company at 23x FY25E EPS of INR 59. Key risks: Incremental competition in niche products, delay in facility resolution."

Cipla Q2 Results: The pharmaceuticals company Cipla declared a rise of 43.3% in its profit to Rs 1130.91 crore as compared to Rs 788.90 crore in the corresponding quarter of FY 2023, beating estimates. The company declared its revenue from operations as Rs 6678.15 crore, up 14.6% from Rs 5828.54 crore in the corresponding quarter of FY 2023. The pharmaceuticals major announced its EBITDA at Rs 1734 crore, up 33.1% from 1302 declared in Q2 FY2023, as per its BSE filing dated October 27, 2023. EBITDA margin was at 26% against 22.2% in the year-ago period.

"Pleased to share an exceptional set of results reflecting the strength of our core business across key markets of India, North America and South Africa. We reported our highest ever quarterly revenue with EBITDA margins scaling up to 26 percent," MD & Global CEO Umang Vohra said in a statement.

Disclaimer: The stock has been picked from the brokerage report of ICICI Securities. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.