Cipla Q3 Results: Stock falls over 4% after US sales narrow, margins hit

Shares of drugmaker Cipla Ltd

. fell as much as 4.5% on Friday, January 23, in response to its December quarter results that significantly missed analyst expectations.

Net profit for the period fell 57% from last year to ₹675.8 crore from ₹1,570.5 crore last year. The figure is well below the CNBC-TV18 poll estimate of ₹1,224 crore. Profitability has also taken a hit due to the one-time cost due to the new labour code, which was ₹276 crore during the quarter.

Even adjusting for the one-time impact, profitability would be lower on a year-on-year basis and well below expectations.

Revenue growth for the quarter was flat at ₹7,075 crore from ₹7,073 crore last year. A CNBC-TV18 poll had projected the figure to be ₹7,557 crore.

Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) for the quarter stood at ₹1,255 crore compared to ₹1,989 crore last year, a 36.7% drop, and well below the CNBC-TV18 poll estimate of ₹1,696 crore.

EBITDA margins saw a sharp erosion during the quarter, down by over 10 percentage points to 17.7% from 28.1% last year. CNBC-TV18 poll had projected the figure to be 22.4%.

Cipla's revenue from the US business declined sequentially to $167 million from $233 million in the September quarter.

Earnings before Interest and Tax for the Pharmaceuticals segment for Cipla narrowed to ₹1,122 crore from ₹1,888 crore during the same quarter last year.

In its notes to accounts, Cipla highlighted that the company has paid ₹1,107.28 crore for acquiring perpetual rights to manufacture and market Galvus and Galvus combination brands, used in the treatment of type 2 diabetes, with effect from January 1, 2026, pursuant to the license agreement with Novartis Pharma AG.

Shares of Cipla are now trading 4.5% lower on Friday after the earnings announcement at ₹1,308. The stock is down 22% from its 52-week high of ₹1,673.