The Telegraph
Since 1st March, 1999
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Company Report


Cipla Limited reported decent performance for the first quarter ended June. Total revenues were up 34 per cent over the previous corresponding quarter to Rs 407.73 crore (Rs 304.01 crore) against an equal percentage of rise in the total expenditure to Rs 347.01 crore (Rs 259.61 crore) resulting in the net profits moving up by 37 per cent to Rs 60.63 crore against Rs 44.40 crore during the year ago period.

Net sales at Rs 402.95 crore were up 35 per cent over the previous corresponding quarter sales of Rs 297.89 crore. With a very strong performance in the asthma, cardiology and anti-bacterial segment domestic sales were up 24 per cent, whereas, exports grew by as much as 62 per cent on a year-on-year basis. Operational costs were up 33 per cent over the previous corresponding quarter to Rs 320.68 crore (Rs 240.61 crore).

Operating profits moved up by 44 per cent over the year-ago period to Rs 82.27 crore (Rs 57.28 crore). OPM was a healthy 20 per cent, up from 19 per cent during the same period last year.

Interest cost fell by 8 per cent to Rs 0.23 crore (Rs 0.25 crore) while depreciation went up by 47 per cent to Rs 7 crore against Rs 4.75 crore during last year. The tax provision for the quarter having gone up by 37 per cent to Rs 19.19 crore (Rs 14 crore) net profit was Rs 60.63 crore, up 37 per cent over last year’s profit of Rs 44.40 crore.

Cipla’s sequential sales performance has been impressive with net sales moving up by 17 per cent over the March quarter sales of Rs 344.89 crore, though the March quarter was down over the December quarter sales.

With operational costs up by 21 per cent over the March quarter, operating profit rose by just about 3 per cent over the March quarter profit of Rs 80.12 crore. OPM was actually down by 3 percentage points over that recorded during the preceding quarter.

Despite the interest, depreciation and tax provisioning having come down by 54 per cent, 2 per cent and 11 per cent respectively, net profits fell by 2 per cent mainly due to falling other income which came down substantially (55 per cent) over Rs 10.74 crore in the March quarter.

The stock currently trades at around Rs 940 discounting its June quarter annualised EPS of Rs 40.44 by 24 times. The stock seems to be adequately priced at these levels, especially because EPS has been stagnant over the last three quarters.

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