Cipla - Q3FY13 Preview - HDFC Securities

Revenue is likely to grow 17% y-o-y on the back of 12% growth in domestic and 22% growth in Export formulations, led by Dymesta launch. However, Lexapro prices have gone down in this quarter as exclusivity finished off last quarter. EBITDA and EBITDA margin is likely to expand led by lower other expenses on the back of improving capacity utilisation at Indore SEZ and favorable currency. Margins could however decline q-o-q due to loss of Lexapro benefit. There could be some milestone income from Meda.

Cipla's PAT could get a strong boost on the back of healthy operational performance, lower interest and depreciation costs, but could get restricted by higher tax rate. Cipla's tax rate could go up on the expiry of EOU benefits. A key thing to watch out for is the regulatory clearances for products from Indore SEZ to boost the exports.

In addition to that, update on launch of inhalers in Europe, timeline for completion of Cipla Medpro acquisition, expected contribution from the South African AIDS drug contract, expected impact from the implementation of the Pricing Policy, 2012 could also have a financial impact on Cipla.

Source : Equity Bulls

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