Strong US sales growth, sustained domestic momentum helps Cipla Q1 net profit beat estimates

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₹996 crore that grew 45.1% year-on-year (YoY) beat Bloomberg consensus analysts' estimates of ₹860.4 crore. The company's income from operations at ₹6,329 crore was up 17.7% YoY. The reported Ebitda at ₹1,494 crore also grew 30.7% YoY.

The North American sales in constant currency terms at $222 million were up 43% YoY and came better than the $204 million of the previous quarter. Analysts had been expecting some weakness in the US business sequentially on the back of higher competition in a key respiratory product. However, support is likely to have been provided by other product contributions.

In rupee terms, at ₹1,822 crore contributing 29% to overall revenues, the North America revenues were up 52% YoY. The company said that its pipeline and execution have been a substantial driver to this growth. Key asset of Lanreotide has improved its market share to 18%.

Focus continues on limited competition launches. The analysts feel that contributions from multiple myeloma treatment drug Revlimid generics also contributed to the US sales growth. Umang Vohra, MD and global CEO of Cipla, in the press briefing post the results announcement, said that there has been some decline in market share in the respiratory inhaler Albuterol generics during the last four months.

But on YoY basis, the market share may be at similar levels and is likely to remain stable. The base business in the US has been growing well despite continued pricing pressure, said Vohra. Meanwhile, the company’s performance in the domestic market also remained strong despite the season not remaining supportive for acute segment of products.