Buy Cipla; target of Rs 1730: Prabhudas Lilladher

Prabhudas Lilladher's research report on Cipla

CIPLA’s Q1FY26 EBITDA (Rs17.8bn; 25.6% OPM) was 6% ahead of our estimates. Cipla managed to deliver strong margins during the quarter. During the quarter company witnessed price erosion for its generic products which was offset by new launches such as gAbraxane. Mgmt guided strong US revenues of $1bn for FY27 despite gRevlimid erosion. We expect Cipla to maintain its existing US sales run-rate. This will be aided by several high value niche launches in the US like gAbraxane, Nilotininb, gAdvair. Further, Cipla’s strong net cash position of +$1.5bn provides flexibility to pursue strategic M&A opportunities. Our FY26E/27E EPS broadly remain unchanged. At CMP, stock is trading 23x FY26E EPS.

Outlook

We maintain our ‘BUY’ with TP of Rs1,730/share. Timely launch of critical high-value products in the US in FY26E/27E will be key.

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Cipla - 28072025 - prabhu