Cipla Q2 Results: Results largely in-line with expectations; US sales, guidance awaited

Drugmaker Cipla Ltd

., is likely to report a drop in its sales for the US market when it reports its quarterly fineprint on Thursday, October 30, according to most analysts covering the stock.

Cipla's US sales are likely to decline on a year-on-year basis due to higher competition for the Revlimid Generic and fewer approvals from the regulator.

Motilal Oswal expects Cipla's US sales to fall 12% from last year to $220 million, while Kotak estimates sales to decline 3% sequentially to $220 million. For the June quarter, Cipla had reported US sales of $226 million.

Cipla's net profit for the quarter increased by 3.8% from the same quarter last year to ₹1,351 crore. This is in-line with the CNBC-Tv18 poll projection of ₹1,348 crore.

Revenue for the quarter stood at ₹7,589 crore, higher by 7.6% from last year, and also above the CNBC-TV18 poll estimate of ₹7,370 crore.

Earnings Before Interest, Tax, Interest and Amortisation (EBITDA) remained flat from the base quarter at ₹1,894 crore, which is in-line with the CNBC-TV18 projection of ₹1,882 crore.

EBITDA margin narrowed by 170 basis points to 25% from 26.7% last year. The margin number also met expectations of 25%.

The street will be looking forward to a pick-up in oncology drugs Nano Paclitaxel and Nilotinib capsules, which were launched in the June quarter.

Cipla's domestic formulations business is likely to grow in the high-single-digits, with estimates projecting growth to be between 7% to 9%. The impact of GST changes on the domestic formulations business will also be noted.

Growth in the European Union, Rest of World markets is likely to be between 8% to 10%.

Commentary on the growth guidance for the rest of the year, price erosion in Revlimid generic and reinspection timeline of the Indore facility are some of the other important things to watch out for during Cipla's results.

Shares of Cipla are trading 0.6% lower at ₹1,570.8 ahead of the earnings announcement. The stock is up 5% in the last one month.