Cipla Ltd - One-offs boosted performance- Maintain Hold - Emkay

Reco: HOLD
CMP: Rs 338
Target Price: Rs 350

- Cipla's Q1FY13 results, in-line - a) Revenues up 24% to Rs19.2bn b) EBITDA up 46% to Rs5.4bn and c) APAT up 30% to Rs3.1bn

- Revenues were driven by 30% growth in domestic. Gross margins expanded 490bps YoY to 61.8% and EBITDA margins expanded 444bps YoY to 26.5% on back of strong India growth, higher export realization due to INR dep. & Lexapro

- PAT was boosted by one-offs such as forex gain of Rs230mn, payment from Meda of USD5mn and Lexapro contribution of Rs500mn

- Going forward these Gross margins are not sustainable and will normalize to 57-58% and EBITDA margins will subsequently come down to 23-24% in H2'FY13. Maintain Hold with a target price of Rs350 (20xFY14 EPS of Rs17.4).

Source : Equity Bulls

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