Cipla Q2 Results: Revlimid competition may weigh on US sales, margin 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.

A CNBC-TV18 poll anticipates Cipla's revenue to grow by 5% from last year to ₹7,370 crore, while its Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) is likely to remain flat on a year-on-year basis.

EBITDA margin for the quarter is seen narrowing by 120 basis points to 25.5% from 26.7% last year, while net profit, according to the CNBC-TV18 poll, may grow by 3% to ₹1,348 crore.

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.