Nomura expects Cipla to report steady growth in the September quarter, with a sequential recovery in EBITDA margin, while maintaining its 'Buy' rating on the stock with a target price of Rs 1,510.
In its October 26 quick note, the brokerage said growth in Cipla's One-India business would be supported largely by partnerships, acquisitions and in-licensing deals, while its core respiratory and anti-infective therapies are likely to remain subdued. Nomura expects the EBITDA margin to improve to 19.2% in Q2FY27 from 16.7% in the previous quarter, in line with management's full-year guidance.
One-India growth supported by partnerships and acquisitions
Nomura expects Cipla to report low- to mid-teen year-on-year growth in its One-India segment, supported by the licensing of diabetes and weight-loss drug tirzepatide, a distribution agreement for Pfizer brands and the acquisition of Inzepra. These contributions are expected to add around 600 basis points to year-on-year growth, according to the brokerage.
However, Cipla's performance in India has been relatively subdued compared with peers. Its two largest therapy segments, respiratory and anti-infective, which account for nearly half of branded formulation revenues, have recorded single-digit growth, according to Pharmarack.