Cipla Limited is one of the leading Indian multinational biotechnology and pharmaceutical companies with headquarters located in Mumbai, Maharashtra. The company primarily produces or manufactures medicines to treat the following medical conditions:
- Cardiovascular diseases
- Respiratory diseases
- Weight control or obesity
Apart from the above, the company also develops medicines to treat a few other conditions. With a market capitalization exceeding Rs.517 billion (7.9 billion USD), Cipla is reported to be one of the biggest publicly traded companies as per the market value.
The market capitalization of Cipla Limited is above Rs.46,500 crore, as of March 2018.
Company’s Wealth And Performance
Q1 FY 2018-19
- For the quarter ended on June 30, 2018, Cipla Limited reported its consolidated total income from operations to be Rs.3,938.9 crore - an improvement of 12% y-o-y.
- The growth came on the account of improvement in company’s businesses in India, South Africa, Sub-Saharan region, and API.
- The consolidated profit after tax for the year was stated to be at Rs.446.6 crore - a marginal improvement in PAT y-o-y. As a result, the basic earnings per share (EPS) for the quarter stood at Rs.5.60, as against Rs.5.08 reported for the same period last year.
- For the year ended on March 31, 2018, Cipla Limited disclosed its consolidated income from operations to be Rs.15,219 crore. With respect to the previous fiscal year, this marks an improvement of 6%.
- The company’s EBITDA was observed to Rs.2,826 crore - a growth of 18.6% y-o-y. It witnessed a strong growth across key markets. India business, along with its operations in South Africa, Sub-Sahara markets, and Europe delivered positive results.
- Cipla Limited also maintained its strong pipeline and over the course of the year, it filed for 24 new formulations.
- The company’s profit after tax stood at Rs.1,411 crore - an improvement of 40.2% with respect to the FY17 PAT.
- The total debt for the year came down from Rs.4,113 crore to Rs.4,098 crore. The company’s earnings per share for the year ended on March 31, 2018, was reported to be Rs.17.53, as against Rs.12.52 stated for the previous fiscal year.
Q3 FY 2017-18
- Cipla Limited released its consolidated financial statements for the third-quarter of the financial year 2018. The report stated that the net income for Q3 FY 2018 increased by 7% at Rs.3,914 crore from last year’s third-quarter, which was at Rs.3,647 crore.
- The EBITDA (Earnings before Interest, Taxes, Depreciation, and Amortization) also inclined by 20.9% and has been reported to be improving continuously due to a drive in the cost optimization in spite of Research and Development stepping up the sales by 7.6%.
- The company has performed extraordinarily in net profit, owing it to the strong sales in major markets across the globe. However, India recorded a double-digit healthy growth along with South Africa and delivered the highest ever quarterly sales.
- The key milestones were accomplished for commencing gAdvair trials and an addition of two trials are expected to start soon.
- Overall, the company has shown a healthy growth in the markets of India, Europe, South Africa, and other Sub-Sahara African regions.
- The company focuses on building a healthy specialty portfolio for the U.S. market and continues with advanced discussion stages in Respiratory Space and Neurology.
Cipla Limited Stock Trends In 2018
- The year 2018 commenced with the stock trading at Rs.608, which kept hovering for the next few days. On January 4, Cipla announced its allotment of securities followed by meeting with the analysts and investors.
- With this, on January 10, the price inclined to Rs.616 per share. By the month end, the stock reached its highest peak to Rs.625 but gradually went down to Rs.608 on the ending day.
- On the first day of February 2018, the share price of Cipla Limited was trading at Rs.591 and kept declining for the next few days.
- However, after the announcement of strong Q3 results, the company surged closely by 8% and peaked at Rs.629 on February 12.
- On February 16, the company announced its allotment of securities under the Regulation 30 (LODR). With this, the price saw ups and lows in the next few days and the month ended with the stock trading at Rs.590.
- The month of March opened with stock price trading at Rs.593.90, which kept fluctuating for the next few days. On March 9, the market saw the biggest dip at Rs.579.95.
- The stock price of Cipla Limited dipped further over the course of March, with the shares eventually descending on to the levels at Rs.540. The closing price of the shares on March 28 was Rs.545.45 on the NSE. Through the month of April, the shares rose steadily to reach their previous levels at Rs.600.
- This growth was led by positive market sentiments and the anticipation of company’s financial results. On May 2, the scrip commenced the trading at Rs.610. However, this rise was followed by a dramatic drop which led to the shares losing roughly 10% in two weeks. On May 22, the shares hit their 52-week low at Rs.507.20.
- Things stayed this way till early June, post which, the share price of Cipla Limited moved on to recover its previous losses. By mid-June, the shares were back to their previous levels at Rs.600. The scrip continued to rise steadily through the course of July as well, with the closing price on July 31 being Rs.641.35. In early August, the company announced a final dividend of 150%.
- The shares continued to rise through the remainder of August. On September 9, the Cipla shares reached their 52-week high at Rs.678.
Cipla Stock Returns In 2016 And 2017
- The year 2016 commenced with stock trading close to Rs.650 on NSE (National Stock Exchange) and BSE (Bombay Stock Exchange). The prices kept fluctuating and plummeted to nearly Rs.579 by the month end.
- On February 10, the company announced its third-quarter results and with this, it allotted 52,296 equity shares followed by an increase in stake by 20%. The price from February to March kept fluctuating but maintained close to Rs.500. However, on March 10, the UK Cipla made a big announcement of investing 3 million USD in Chase Pharma.
- With regular conferences with the investors and analysts, the share price of Cipla Limited kept fluctuating between Rs.500 and Rs.545 from March to April. The market value grew after Cipla tied up with a global NGO for improving the diagnosis of Hepatitis C.
- During Q1 FY 2016, Cipla accomplished a revenue of Rs.3,853 crore and according to the reports, the growth increased by 41.6% from the last year. The EBITDA margin also inclined by 27%, owing it to the strong sales in the healthcare business.
- During Q2 FY 2016, the company accomplished a revenue of Rs.3,452 crore, which was comparatively low from the previous quarter but still had an inclination from the last year’s second-quarter results.
- During Q3 FY 2016, the company attained a revenue of Rs.3,107 crore with a 12.3% growth from the previous year. The export business grew by 28% due to a strong performance in South Africa and other emerging markets.
- During Q4 FY 2016, the company attained a revenue of Rs.3,267 crore with a 5.6% growth from the previous year. However, the EBITDA plummeted by 56.9% at Rs.219 crore from Rs.508 crore.
- With this, the financial results of 2016 ended with an improved growth and the company ranked third in the Indian Medicine Business, with a total of 5.3% market share. Overall, the domestic sales grew by 5.9%, owing it to the growth momentum in anti-infective, respiratory, gastrointestinal, and urology therapies.
- During Q1 FY 2017, the company earned a revenue of Rs.3,594 crore but was comparatively less from the last fiscal year’s first quarter results. However, the business growth in the U.S. market remained steady, excluding the Esomeprazole sales and procurement of Exelan Pharmaceutical Incorporation and InvaGen Pharmaceutical Incorporation.
- During Q2 FY 2017, Cipla earned a revenue of Rs.3,751 crore with EBITDA at Rs.681 crore. The total profit after tax was Rs.354 crore, owing it to the healthy sales in India. Meanwhile, in South Africa, both tender business and the private market continued to demonstrate growth momentum by 15.4%.
- During Q3 FY 2017, Cipla gained a revenue of Rs.3,647 crore with an 18% growth in the domestic sales and 14% in the international sales. While the EBITDA inclined by 46% at Rs.678 crore, the other operating income for the quarter inclined by 20% at Rs.97 crore.
- During Q1 FY 2018, the company achieved greater heights. Cipla was ranked first as the most respected and renowned companies. It received multiple awards and improved its operational efficiencies by driving the margin expansion. In the first quarter, the company achieved a total income of Rs.3,525 crore. Though it is a good figure, the domestic sales went down by 13% and other operating revenue down by 1%. But the international sales and EBITDA saw a growth of 4% and 6% respectively.
- During Q2 FY 2018, the company saw a tremendous growth in both domestic and international markets by 10% and 7% respectively. Cipla gained an income of Rs.4,082 crore and the EBITDA at Rs.804 crore. The PAT (Profit after Tax) was Rs.423 crore and overall, the business showed a growth that was not seen in the last few years.
- During Q3 FY 2018, the company earned an income of Rs.3,914 crore with an increase in domestic and international sales by 12% and 5% respectively. However, the other operating revenue was down by 5%.
- The quarter ended with an approval for Decitabine (g-Dacogen) and Budesonide (g-Pulmicort), followed by a strong sales in the existing as well as new products.
Should You Invest In Cipla Limited?
- Cipla is one of the best global pharmaceutical companies whose objective is to make sure that patients have access to high-quality medicines but at an affordable cost.
- Now, considering the company’s FCF (Free Cash Flow) for the last 5 years, it has significantly grown. Despite FCF being good, the growth rate of both EPS (Earnings Per Share) and ROE (Return on Equity) are mediocre.
- However, after the approvals of generic-Dacogen and generic-Pulmicort, Cipla reaffirms positive views in the U.S. pipeline.
- Cipla is more likely to arise as one of the biggest beneficiaries of the issues plaguing its peers, provided its lower base, a strong pipeline will certainly benefit from the review cycles.
- With this, the company has stayed in the top 3 positions in the pharmaceutical industry of South Africa and India, making it one of the valid reasons to invest.
Cipla is one of the best pharmaceutical companies that utilizes innovative and cutting-edge technology to satisfy the medical concerns of patients around the world. Serving for more than 80 years, the company has developed as one of the most reputed and renowned Indian pharmaceutical names.
The company supplies its medicines to more than 80 countries and its portfolio features 1500+ products ranging from various therapeutic categories but with a standard quality. Keeping a long-term sustainable industry in mind, Cipla has emphasized and recognized the need to give affordable medicines.
In fact, it has been reported to be the world’s first medicinal company to give a triple mixture ARV (anti-retroviral) for AIDS/HIV treatment in Africa at a cost of less than one dollar per day. Since 2001, the company has not only treated millions of patients but also continues to concentrate on creating innovative medicinal products.
Cipla features 34 manufacturing divisions spread in 8 different industry locations in India. However, the company has made its global presence in 100 different countries as well. The main focus of the company is in R&D to come up with better drug-delivery systems, new drug formulations, and API (Active Pharmaceutical Ingredients).
The company also collaborates with a few other enterprises like commissioning, consulting, project appraisal, engineering, know-how transfer, quality control, plant supply, and support.
History Of The Company
Khwaja Abdul Hamied founded The Chemical, Industrial, and Pharmaceutical Laboratories in the year 1935 in Mumbai but the name was changed to Cipla in 1984. The United States FDA (Food and Drug Administration) approved Cipla’s wholesale drug manufacturing capabilities in 1985.
The company is now led by Yusuf Hamied, a chemist graduated from the Cambridge University and the son of K.A. Hamied. Cipla is into providing generic AIDS drugs and a few other medicines to cure patients who are poor in many developing countries.
In 1994, the company launched the world’s first ever oral iron chelator called Deferiprone. In 2001, it offered medicines for treating HIV at a very affordable cost of $350 per patient for a year. In 2013, the company attained Cipla-Medpro, the third largest South African pharmaceutical firm and kept that as its subsidiary. Later, the name was changed to Cipla Medpro South Africa Limited.
Dr. Y.K. Hamied – The Non-Executive Chairman of Cipla
The non-executive chairman of Cipla is Dr. Y.K. Hamied and he belongs to the 2nd generation of the company’s founding family. He is a well-known scientist and acquired his Ph.D. from the University of Cambridge in organic chemistry during the year 1960. He joined the company as a skilled R&D Officer in the same year.
In 1976, Dr. Hamied was selected as the MD (Managing Director) of Cipla and became the Chairman in 1989. On March 31, 2013, he retired as a Managing Director but continued as a Chairman in the non-executive role from 2013.
From offering affordable drugs for HIV patients to enabling the world’s biggest portfolio of devices and drugs in the inhalation therapy, Dr. Hamied’s immense contribution and pioneering work to the healthcare industry have been celebrated throughout the world. In 2005, the Indian Government honored him with the Padma Bhushan Award and in 2013, NDTV mentioned him in the list of 25 Global Living Legends in India.
Dr. M.K. Hamied – The Non-Executive Vice-Chairman of Cipla
The non-executive vice-chairman of Cipla is M.K. Hamied and he also belongs to the 2nd generation of the company’s founding family. M.K. Hamied is graduated as a science student from the Bombay University.
His varied and vast experience in the company includes technical areas, production, general administration, and quality management. On March 31, 2014, he retired as an executive vice-chairman but continued the position in the non-executive role from April 2014.
Samina Vaziralli – The Executive Vice-Chairperson of Cipla
The executive vice-chairperson of Cipla is Samina Vaziralli and she belongs to the 3rd generation of the company’s founding family. She graduated from the London School of Economics and has also worked with the leading firms in the U.K. and U.S.
She has been not only influential but also contributed greatly in boosting the company's present transformation agenda. She played an important role in shaping and incubating Cipla Limited into the American market with tactical acquisitions.
Umang Vohra – Global CEO (Chief Executive Officer) and Managing Director of Cipla
Umang Vohra is the Global CEO and Managing Director of Cipla. With degrees in marketing, finance, and engineering, Vohra initially worked with PepsiCo, Dr. Reddy’s, and Eicher Motors. With the help of his experiences in various businesses and past roles in US & India, he built a notable career among others. At Cipla, he has been credited to revamp the European operations and thereby, enabling a progress in profitability.
Cipla Limited Listings And Indices
The Cipla’s equity shares are listed in both:
- NSE (National Stock Exchange of India)
- BSE (Bombay Stock Exchange)
The NSE code of Cipla is CIPLA and BSE code is 500087. It is an important constituent of the BSE SENSEX index and CNX Nifty. Its GDRs (Global Depository Receipts) are listed in the LSE (Luxembourg Stock Exchange) as well.
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