This Pharma Stock Can Offer 26% In 1 Year: Emkay Global Recommends

The brokerage firm Emkay Global recently recommended buying the stocks of Cipla for 25.90% upside. The firm mentioned, "Q3 revenue of Rs. 54.8bn beat our estimates by 3% on better-than-expected growth in India and the US."

Target Price

The Current Market Price (CMP) of Cipla is Rs. 906. Emkay Global has estimated a Target Price for the stock at Rs. 1140. The company is expected to offer a 25.90% upside, in 1 year.

Stock Outlook
Current Market Price (CMP)	Rs. 906
Target Price	Rs. 1140
1 year return	25.90%

Company performance

Cipla's EBITDA, which stood at Rs. 12.3bn, by beating the firm's estimates by 5% on revenue beat and lower-than-expected other expenses. For FY23, management expects growth momentum to continue across segments. Product launch momentum in US should pick up in H2FY23. India revenue grew by 13% yoy, supported by healthy Rx order flows, with the core portfolio growing by 16%. Covid-related sales declined by 17% qoq at the company level. South Africa grew by 8% yoy, driven by growth in the private market business. On the other hand, RoW and API businesses were down by 6% and 25% yoy, respectively.

Comments by Emkay Global

Commenting on the company stock, Emkay Global said, the company's "R&D expenses are expected to inch up, operating leverage is expected to offset it: US revenue grew by 6% sequentially to US$150mn, driven by strong traction in respiratory products, such as Albuterol and gBrovanna. We reiterate our Buy rating on Cipla, after an all-around beat in Q3FY22. We also maintain our revenue, EBITDA, and earnings estimates for FY22, FY23 and FY24. We believe that Cipla has the best US generics pipeline, coupled with a strong branded business in India and South Africa."

About the company

Cipla has extended its presence to 80+ countries providing over 1,500 products across various therapeutic categories in 50+ dosage forms. To make healthcare more affordable globally, we are deepening our presence in the key markets of India, South Africa, the US among other economies of the emerging world. The company was incorporated in 1935., and its turnover is around USD 2.3 Bn.

Disclaimer

The above stock was picked from the brokerage report of Emkay Global. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.