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Informist, Tuesday, Jul. 21, 2026

By Gunjan Rajput 

NEW DELHI – Cipla Ltd. is expected to report a sharp fall in June-quarter earnings as lower contribution from its US business is likely to hurt profitability despite continued strength in its India business. The US business is seen under pressure as sales of generic cancer drug Revlimid declined on intensifying competition, while those of Lanreotide remained absent as production at the manufacturing partner's facility is yet to resume. Mumbai-headquartered Cipla's consolidated net profit is expected at INR 8.52 billion for the June quarter, according to the average of estimates from 10 brokerages. This was over 34% down on year. The highest estimate for the company's net profit is INR 10.23 billion by Systematix Shares and Stocks (India) Ltd., and the lowest estimate is INR 7.18 billion by Nirmal Bang Equities Pvt Ltd.

The pharma company's revenue for the reporting quarter is expected to be INR 71.04 billion, marginally up on year, according to the estimates. The highest estimate for the company's revenue is INR 73.69 billion by Elara Securities (India) Pvt. Ltd., while the lowest estimate is INR 68.04 billion by Nirmal Bang Equities. On a sequential basis, the net profit is seen rising nearly 54% and revenue is seen nearly 9% higher.

Cipla is one of India's leading pharmaceutical companies with a strong presence in respiratory therapies and a significant share of revenue from the US market. The company is likely to see a sharp decline in revenue from the US business, with revenue from the geography estimated to fall 23–33% year-on-year to $150 million-$173 million, according to brokerages. The sharp decline in profitability of the US business follows the increased competition in generic Revlimid and the continued absence of Lanreotide sales. Most brokerages expect US sales to decline despite contributions from recently launched products such as generic Ventolin and generic Ofev, as these are unlikely to fully offset the fall in revenue from legacy products during the quarter. Systematix expects generic Ventolin to contribute meaningfully only from the September quarter of the financial year 2026-27 (Apr-Mar). "Additionally, high freight costs amid ongoing geopolitical disruptions are expected to weigh on profitability during the quarter," said Motilal Oswal Financial Services Ltd. in its report.

In contrast, the India business is expected to remain resilient with domestic formulations likely to post 11-13% year-on-year growth led by respiratory, chronic therapies, consumer health, and glucagon-like-peptide-1 segments. "Progress on the deal with Eli Lilly to distribute and promote Terzapatide (Tirzepatide) in India," Motial Oswal said in the report.

Growth in South Africa and other international markets is also expected to lend support to the overall revenue. The company's revenue from its Africa business is expected to grow 12% on year for the quarter, led by a similar on-year growth in South Africa and favourable currency movement, as depreciation of the Indian rupee against the South African rand boosted the reported revenue, according to Kotak Securities Ltd. For Europe and the rest of the world, Kotak expects around 7% on-year growth in revenue.
 

The company's earnings before interest, tax, depreciation, and amortisation are estimated at INR 13.06 billion for the June quarter, down nearly 27% on year. The highest estimate for the company's EBITDA is INR 16.04 billion by Systematix Shares and Stocks India. While the lowest is INR 11.62 billion by Motilal Oswal Financial Services.

EBITDA is expected to decline as Cipla's profitability comes under pressure from the loss of high-margin generic Revlimid sales and the continued absence of Lanreotide sales in the US. Brokerages also expect an unfavourable product mix to affect margins, while contributions from recently launched products such as generic Ventolin and generic Ofev are likely to remain limited during the quarter and it will not fully offset the decline in the legacy portfolio. Healthy growth in the India business is expected to partly cushion the impact but it is unlikely to prevent a sharp drop in operating profit. The year-ago quarter had also benefited from higher contribution from generic Revlimid, resulting in a high base for comparison.

Analysts will closely watch management commentary on the recovery of the US business, the commercial ramp-up of generic Ventolin, progress on the respiratory and peptide pipeline, updates on Lanreotide supplies, and the growth trajectory of glucagon-like-peptide-1 products in India.

Cipla is scheduled to report its June quarter results on Thursday. Tuesday, Shares of the company closed marginally lower at INR 1,432.50 on the National Stock Exchange. The shares have risen nearly 8% since the company reported its March quarterly results.

Out of the 12 brokerage reports on the company available with Informist, eight have a "buy" recommendation on the stock with an average target price of INR 1,545. This is nearly 8% higher than the current market price. Two brokerages have a "hold" recommendation on the stock with an average target price of INR 1,392. Two brokerages have a "sell" recommendation on the stock with an average target price of INR 1,368.

The following are the June quarter earnings estimates for Cipla from 10 brokerages in descending order of the estimate of net profit in INR billion:
 

Brokerage name	Net Sales	Net Profit	EBITDA
Systematix Shares and Stocks (India) Ltd	72.43	10.23	16.04
Elara Securities (India) Pvt Ltd	73.69	9.42	13.46
JM Financial Institutional Securities Pvt Ltd	72.89	9.27	14.55
Nuvama Wealth Management Ltd	73.67	8.99	13.26
Prabhudas Lilladher Pvt Ltd	69.34	8.52	12.67
ICICI Securities Ltd	68.40	8.19	12.31
Kotak Securities Ltd	70.92	8.05	12.31
PhillipCapital (India) Pvt Ltd	71.05	7.70	12.30
Motilal Oswal Financial Services Ltd	69.98	7.66	11.62
Nirmal Bang Equities Pvt Ltd	68.04	7.18	12.09
Average	71.04	8.52	13.06

 

End

 

Edited by Deepshikha Bhardwaj

 

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