Motilal Oswal Financial Services has issued a buy call on Cipla, a leading pharmaceutical company, with a target price of Rs 1420. The current market price of Cipla is Rs 1243.15. Cipla, incorporated in 1935, is a Large Cap company operating in the Pharmaceuticals sector. The company’s key products and revenue segments include Pharmaceuticals, Royalty Income, Other Operating Revenue, Export Incentives, and Scrap.
For the quarter ended June 30, 2023, Cipla reported a consolidated total income of Rs 6465.18 Crore, up 10.07% from the previous quarter. The company’s net profit after tax for the same period was Rs 996.58 Crore.
Motilal Oswal Financial Services cites Cipla’s strong respiratory franchise, higher chronic share at 60% of DF sales compared to the industry average of 40%, and healthy growth potential across prescription, trade generics, and consumer healthcare segments as factors that would drive industry outperformance in the DF segment.
The brokerage values Cipla at 25 times its 12-month forward earnings and adds a Net Present Value (NPV) of INR30 related to g-Revlimid to arrive at its target price of INR1,420.
Promoters hold a 33.47% stake in Cipla as of June 30, 2023, while foreign institutional investors (FIIs) own 25.49% and domestic institutional investors (DIIs) own 23.83%.
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