Cipla reported $172 million in US sales for the second quarter, marking a 6.2% quarterly growth. While the company maintains its EBITDA margin guidance, analysts have lowered earnings estimates due to revised projections. Investors are focusing on the company's progress in respiratory and peptide product launches as it aims for a $250 million US run-rate by Q4 FY27.
Cipla Ltd reported US sales of $172 million for the second quarter of the current fiscal year, reflecting a 6.2% increase over the previous quarter. The company is actively shifting its focus toward a specialized portfolio of respiratory and peptide products to drive long-term expansion in the US market. This strategy is central to management's goal of reaching a quarterly US sales run-rate of $250 million by the fourth quarter of fiscal year 2027.
Scaling Respiratory and Peptide Portfolios
The company’s recent performance in the US has been supported by regulatory approvals for key products, including gVentolin and gAdvair, secured in the first half of the year. Management is currently working toward further approvals for additional respiratory and peptide products in the latter half of the fiscal year. This focus on complex generics is intended to replace revenue from older, one-off opportunities, such as the gRevlimid portfolio, which provided a high base for comparison in the previous year.
Margin Outlook and Earnings Estimates
While the core operating performance remained consistent with market expectations, ICICI Securities has revised its fiscal year 2027 and 2028 earnings per share estimates downward by 12% and 4%, respectively. This adjustment accounts for updated projections regarding other income and contributions from the US market. Despite this change, Cipla has maintained its EBITDA margin guidance in the 18.5% to 20% range for the full fiscal year. This stability suggests that the company is managing its operational costs effectively, even as it invests in its product pipeline.
Domestic Performance and Risks
The domestic business remains a stable contributor, with branded portfolios growing at 15% during the period. This growth is driven primarily by an uptick in chronic therapies and GLP-1 products, while the trade generics and consumer-facing portfolios are also expected to return to double-digit growth. However, investors should remain aware of potential challenges. The sector is subject to intense competition and regulatory scrutiny in the US market, which can impact the approval timeline for new respiratory and peptide products. Furthermore, the fading benefit from high-margin legacy products like gRevlimid continues to weigh on year-on-year growth comparisons.
Moving forward, the primary monitorables for stakeholders will be the actual execution of the $250 million US sales run-rate goal and the timely receipt of pending regulatory approvals. The pace of new product launches and the company’s ability to maintain its margin guidance against changing market conditions will determine the sustainability of its growth trajectory.