Cipla reported a significant decline in Q2 FY27 performance with consolidated net profit falling 35% year-on-year to ₹878 crore compared with approximately ₹1,351 crore in the corresponding quarter last year. Revenue from operations declined 2.4% year-on-year to ₹7,404 crore in the second quarter of FY27, compared with approximately ₹7,589 crore in the year-ago period. The earnings reflected a contraction in both the company's topline and bottomline, with the decline in net profit considerably sharper than the fall in revenue. Cipla shares closed 0.22% lower at ₹1,350 per share on the BSE on Tuesday following the earnings announcement, as investors assessed the pharmaceutical company's quarterly performance amid broader market weakness. The company attributed these declines to rising freight and input costs by 100-200 basis points in the second quarter, which significantly impacted profitability despite some sequential recovery.
Cipla delivered global revenues of ₹7,404 crore in Q2 FY27 with a sequential growth of 4% quarter-on-quarter, demonstrating some recovery momentum despite year-on-year challenges. EBITDA margin expanded by 200 basis points QoQ to 18.7% in the reporting quarter, showing sequential improvement from the previous quarter's performance. However, EBITDA slipped 27% year-on-year to ₹1,388 crore compared to ₹1,895 crore reported in Q2 FY26, reflecting the impact of adverse product mix and continued pressure on the US business. The margin contraction to 18.7% from 25% year-on-year indicates ongoing challenges in maintaining profitability levels, with the sharper fall in profit compared with revenue indicating the extent of pressure on the company's operating performance. The company expects sequential profit growth to continue for two more quarters and aims to achieve $1 billion in revenue in North America in the financial year 2027. ICICI Securities has maintained its Buy rating on Cipla Ltd. after the pharma company posted its September-quarter results, with an unchanged target price of ₹1,610, valuing the company at 24 times FY28E earnings per share, earlier 23 times FY28E EPS. The brokerage highlighted that Cipla's Q2 FY27 operating performance was in line with its expectation, although the high base of gRevlimid sales last year continued to weigh on reported performance.
US sales demonstrated strong sequential improvement, rising 6.2% quarter-on-quarter to $172 million in Q2 FY27, as reported by NDTV Profit. Backed by launches of respiratory and peptide products, management continues to expect US sales to inch up to a run-rate of $250 million by Q4 FY27. The company secured approvals for two key respiratory products, gVentolin and gAdvair, in H1 FY27, and approval for two more respiratory products and one peptide product is anticipated in H2 FY27. The company retained a $334 million run rate of US sales for the second half of financial year 2027, focusing on growth via new product launches and plans to add at least two new biosimilar assets each year. Led by an uptick in chronic therapies and GLP-1 products, growth in the branded portfolio continues to be robust (+15%, as per IQVIA), while the trade generic and consumer portfolios are expected to regain double-digit growth momentum. Management believes margins would expand sequentially over the next two quarters and maintained its FY27 EBITDA margin guidance of 18.5-20%, with ICICI Securities cutting its FY27/28E EPS by ~12%/4% to factor in lower other income and US sales.
India remained the company's strongest growth market, with revenue from its domestic business, including prescription medicines, trade generics and consumer health, rising 12% year-on-year to ₹3,516 crore compared with ₹3,146 crore in the corresponding period last year. The branded prescription business recorded market growth of 15%, with respiratory, urology, cardiac, anti-diabetes and dermatology therapies registering strong double-digit growth, according to company announcements. Managing Director and Global CEO Achin Gupta noted that this growth was primarily led by branded prescription business delivering robust growth, which saw 15% growth in chronic segments such as respiratory, urology, cardiac and anti-diabetes therapies. In North America, the company reported quarterly revenue of ₹1,643 crore, declining 19% year-on-year from ₹2,039 crore, remaining a major source of weakness for the company.
Cipla received US Food and Drug Administration approval for generic Advair Diskus, marking the first dry powder inhaler approval from its US manufacturing network, as reported by The Economic Times. The company also entered an exclusive partnership with Qilu Pharmaceutical to commercialise a biosimilar of cancer drug Keytruda, supporting its product pipeline development. The firm will be adopting a wait-and-watch approach to entering the semaglutide market and plans to launch two more respiratory products in the US in fiscal 2027, including Advair, a prescription combination inhaler for asthma control expected in the third quarter. The company will launch a biosimilar to Keytruda, a prescription drug used to treat cancer in the financial year 2029, to capture the first wave advantage. Cipla stated that Yurpeak has become India's second-largest GLP-1 brand and is looking for the second source of supply for Lanreotide, a drug that manages acromegaly in the US, working with Pharmathen to resolve issues with the US Food And Drugs Administration for Lanreotide. The company's research and development spending was at 6-7% of total sales with an aim to file 45-50 products over the next three years, with four biosimilar candidates under development for global markets.
Cipla shares closed 0.22% lower at ₹1,350 per share on the BSE on Tuesday following the earnings announcement, as the earnings performance highlighted a divergence in the company's business operations. The sharper fall in profit compared with revenue indicates the extent of pressure on the company's operating performance, with lower sales in key overseas markets and weaker contributions from certain business segments affecting earnings during the quarter. From the beginning of the year, Cipla shares have slipped 12%, reflecting investor concerns about the company's performance trajectory. Over a month's time, the stock has fallen 4%, while it climbed 0.6% in the past six months. According to NSE data, as of October 27, 2026, Cipla has a total market capitalisation of ₹1.08 lakh crore, with shares having hit a 52-week high of ₹1,593.80 on October 27, 2025, and a 52-week low of ₹1,165.70 on April 2, 2026. The company expects Africa sales to improve in coming quarters with a favourable ruling in court on the Africa tender, while expecting better earnings on new launches and ramp-up in existing prescription digital therapeutics in FY28. Management believes margins would expand sequentially over the next two quarters and maintained its FY27 EBITDA margin guidance of 18.5-20%, with ICICI Securities retaining its BUY rating on the stock with an unchanged TP of INR 1,610, based on 24x FY28E EPS.
