Cipla 3QFY2016 Results: Angel Broking

Views of Ms. Sarabjit Kour Nangra (VP Research - Pharma, Angel Broking) on Cipla 3QFY2016 Results:

Cipla (CMP: INR 539 / TP: INR 637/ Upside: 18.2%)

"For 3QFY2016, the company posted lower than expected results. The sales came in at INR 3027cr V/s INR 3367cr expected and V/s INR 2625cr in 3QFY2015, a YoY growth of 15.3%, mainly lead by exports. The domestic sales (INR 1194cr) posted a dip of 0.4%, while Exports (INR 1833cr) posted a YoY growth of 28.5%. On the operating front, the OPM's are expected to come in at 12.0% V/s 19.9% expected V/s 15.7% in 3QFY2015. The low OPM was, on back of the GPM which came in at 58.9% V/s 63.9% expected and 62.3% in 3QFY2015. According to the Management, the company has lost 2.5% on back of change in distribution policy and around 0.7% impact on back of currency impact of ZAR. Last corresponding period the company had a 2% dip in margins due to one off expenditure. The R&D expenditure during the quarter was 8% of sales compared to 6% of sales during the last corresponding period. Thus the Adj. net profit came in at INR 343cr V/s INR 400cr expected and V/s INR 328cr in 3QFY2015, registering a YoY growth of 4.7%. We maintain our BUY rating on the stock, with a price target of INR 637."

Shares of CIPLA LTD. was last trading in BSE at Rs.528.6 as compared to the previous close of Rs. 541. The total number of shares traded during the day was 226964 in over 6403 trades.

The stock hit an intraday high of Rs. 542.2 and intraday low of 525. The net turnover during the day was Rs. 121036569.

Source : Equity Bulls

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