Cipla shares jump 7% after at least six analyst upgrades on Q4 results, outlook

Shares of Cipla

Ltd. surged over 7% on Thursday, May 14, after multiple brokerages turned positive on the stock following its March quarter earnings and improved visibility on its US business pipeline.

Brokerage firm JPMorgan upgraded Cipla to ‘Overweight’ and raised its confidence on the company’s medium-term earnings outlook, assigning a price target of ₹1,550.

The brokerage cited stronger earnings growth visibility driven by complex product launches in the US market over the next two years, along with attractive valuations after the recent correction in the stock.

Management has guided for a US business exit run-rate of $1 billion in FY27, a sharp increase from the current quarterly run-rate of $155 million.

JPMorgan said Cipla’s upcoming pipeline, including launches of gVentolin, gAdvair, gSymbicort and select peptide products, as key growth drivers.

The brokerage said the pipeline now carries more tangible milestones, including regulatory approvals, completed pre-approval inspections and defined launch timelines, increasing confidence on execution.

Cipla currently trades at a 5-10% discount to peers like Dr. Reddy's Laboratories and Lupin on FY28 estimated earnings, making valuations attractive, according to JPMorgan.

Citi also maintained a ‘Buy’ rating on the stock and raised its target price to ₹1,700.

Citi said Q4 trends remained healthy, led by around 15% growth in the India business, stable US sales despite the phase-out of gRevlimid and Lanreotide, and sequential expansion in gross margins.

The brokerage added that geopolitical and logistics-related disruptions impacted the EMEU and API businesses during the quarter, though recovery is expected over the coming quarters.

Citi also viewed management commentary positively, particularly around double-digit India growth, the $1 billion US sales aspiration and pipeline visibility for FY27.

Cipla guided for FY27 EBITDA margins in the range of 18.5-20%, factoring in higher input costs. The company also indicated confidence in achieving EBITDA margins above 20% in FY28 if planned launches are executed on schedule.

Meanwhile, HSBC maintained a ‘Hold’ rating with a target price of ₹1,340. The brokerage said execution of new launches will remain critical for Cipla to achieve its FY27 US sales target.

HSBC added that while the worst appears to be over for the US business, sustained improvement in sales will be essential to support future growth.

Cipla’s Q4FY26 earnings were impacted by lower generic Revlimid and Lanreotide sales in the US market.

However, adjusted EBITDA excluding impairment stood at ₹997 crore, while adjusted EBITDA margin came in at 15.3%, broadly in line with estimates.

Geographically, the India business grew 15% year-on-year to ₹3,007 crore, while the One Africa business rose 21% to ₹1,236 crore.

South Africa revenue increased 33% year-on-year. North America revenue declined 26% to ₹1,414 crore, though quarterly sales of $155 million came above the lower end of expectations.

EMEU revenue fell 9%, while API revenue declined sharply by 77% year-on-year.

The company ended the quarter with a net cash position of ₹10,526 crore.