Cipla - Rating – Buy; Target Price – 560 - Centrum

- We expect Cipla to report 5.6%QoQ growth in revenues to Rs26.53bn as the company has been reporting consolidated results from Q2FY14 with the acquisition of Cipla Medpro, S. Africa.

- The company has commenced filing ANDAs from its Indore SEZ and is likely to benefit from it.

- The company's Indore SEZ was approved by US FDA and the company is ramping up capacity utilization at this facility.

- We expect Cipla's EBIDTA margin to improve by 20bps QoQ to 22.7% from 22.5%.

- Cipla has completed the acquisition of 100% stake in Cipla Medpro, S. Africa for Rs27.07bn. The company has acquired additional 14.5% stake in quality Chemicals Industry, Uganda for $15mn (Rs930mn). It also acquired 100% stake in Celeris, Croatia for an undisclosed sum. Celeris is the distributor of Cipla's products in Croatia.

- We expect the company's net profit to improve by 8.9%QoQ to Rs3.90bn.

- Our target price of Rs560 is based on 22x Dec'15 EPS of Rs25.5.

Source : Equity Bulls

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