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Cipla Q4 results today: Key things to watch out for

Updated : May 22, 2019 09:47 AM IST

Pharma giant Cipla will be reporting its fourth quarter earnings today. The street is expecting a revenue growth of around 9 percent but the range is wide and goes up to 12 percent.

Street is expecting margin improvement at 17.5 percent compared to 15 percent for the same quarter last fiscal and profit of over Rs 300 crore.

The street will focus on some of the key geographies like North America, which is expected to rise at 29 percent year on year. The management had guided for an exit run rate of $125 million and the company did around $118 million in Q3. The hope this time is the company will meet that guidance.

With regards to Cipla's India business, it could be a single-digit growth of around 8 percent YoY because it is a seasonally weak quarter for the industry.

The management commentary will be important in terms of their product pipeline and guidance for FY20.

Key highlights

- Expect pick-up in revenue compared to last quarter; margins around 17 percent

- Q4 is generally seasonally weak for the company

- Growth in recent past was impacted by channel de-stocking

- Impact of channel de-stocking could reverse in Q4FY19 to an extent

- Domestic growth estimate range between 8-10 percent to 21 percent (YoY)

- India business seen (RD) 2 percent at Rs 1,604 crore

- US markets: Management guided for an exit run rate of $125 million vs $118 million in Q3

- Expect company to achieve guidance or sales of around $120-125 million in the US market

- Drugs like Voltaren gel and Pulmicort generic did not see any material erosion

- New launches like Sensipar generic to aid US numbers

-South Africa, emerging markets, global tender business expected to continue sluggish performance

- Tender business has halved over past 2 years to around $75 million

- Margins expected to be maintained at Q3 levels of around 17 percent

- Higher opex and lower domestic sales could impact margins

- R&D expenses should be around 7-8 percent of sales

- Company said it will be comfortable with margins of 20 percent

- Commentary on 18 observations to Kurkumbh facility will be watched

- Commentary on US guidance, pricing pressure, domestic business
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