Cipla shares have surged 11% over two trading sessions following the announcement of quarterly results, with the stock trading at ₹1,432 apiece after opening at ₹1,432. According to reports from NDTV Profit, the pharmaceutical major's scrip was trading 7.24% higher by 9:23 a.m., significantly outperforming the benchmark NSE Nifty 50 which was up 0.67% during the same period. The latest data shows the stock has extended its gains beyond the initial 8% surge, reflecting continued investor confidence despite the challenging quarterly results.
In the January to March quarter, Cipla's net profit stood at ₹555 crore, representing a 54% decline compared to the same period last year. As reported by NDTV Profit, the bottom line missed analyst estimates of ₹716 crore. The company's revenue for the quarter was ₹6,541 crore, marginally below the analyst estimate of ₹6,701 crore, with the topline actually seeing a degrowth of 2.8% compared to the same period last year.
According to the quarterly results, margin compression was significant, going from 22.8% in Q4FY25 to just 14.6% in the current quarter. As reported by NDTV Profit, this substantial margin decline contributed to the overall profit decline despite the company's operational performance. The margin compression was attributed to various operational factors affecting the pharmaceutical major's profitability metrics.
Despite the profit decline, analysts maintain mixed views on Cipla's prospects. Kotak maintains a 'Buy' rating with a target price of ₹1,625, citing strong domestic growth of 15% year-on-year and robust H2FY27 expectations. Morgan Stanley maintains an 'Underweight' rating while cutting the target price to ₹1,218 from ₹1,237, expressing concerns about weak earnings and FY27 remaining a transition year. Goldman Sachs maintains a 'Neutral' stance while raising the target price to ₹1,350 from ₹1,325, focusing on India and South Africa performance and US pipeline developments.
