Cipla Ltd — Q2 FY24
Cipla delivered a record quarter with revenue of ₹6,678 crore (+15% YoY) and EBITDA margin of 26%, driven by double-digit growth across India (+10%), North America (+28% to $229...
bullish
high
✓ Verified against BSE filing
Claim Ledger
Did management answer the analysts?
Every material analyst question, graded on whether management actually answered it — with the verbatim exchange and quantitative claims checked against filed numbers.
83%Questions answered1Evaded / deflected12Questions auditedContradictedNumbers vs filing
Answered
High priority
India growth excluding acquisition and reason for slowdown
Asked by Saion Mukherjee, Nomura Securities
Management directly addressed the growth calculation and explained the tender replacement, providing clear numbers.
Read the exchange
Question
if I were to exclude the acquisition that you did, it looks like the growth is around 7%. And you mentioned trade generics growing in double digits. Does it mean that the overall prescription and the consumer business is trending around 5%-6%? And if that's the case, what's the reason for the slowdown?
Ashish Adukia, Global CFO
the internal growth estimates for the branded prescription and the generic business are well over 11%. If you take out the acquisition, I think you have to take out from last year, we had a certain tender position in one of the products we had won, and that's basically replaced by the acquisition we've made.
Answered
Medium priority
Other expenses flattish QoQ despite seasonally heavy quarter
Asked by Saion Mukherjee, Nomura Securities
Management explained the flat expenses with gross margin improvement, operating leverage, and prior recall costs.
Read the exchange
Question
your other expenses is quite flattish quarter-on-quarter, despite, you know, a seasonally sort of heavy quarter in terms of revenues and also R&D costs moving higher. So is there anything there, and how should we read this going forward?
Ashish Adukia, Global CFO
combination of two things. One is, you must have noticed the improvement in your gross margin, which is flowing through to your EBITDA. And there is some bit of operating leverage that exists. If you're comparing to just previous quarter, the previous quarter had some recall costs sitting out there, of albuterol that we had talked about.
Partial answer
High priority
Market size and competitive scenario for peptide product launching in FY24
Asked by Tushar Manudhane, Motilal Oswal Financial Services
Management refused competitive details but provided a market size range after follow-up.
declined competitive detailsgave only broad market size range
Read the exchange
Question
with respect to the product which you have highlighted, to be launched in FY 2024, the peptide product, if you could share some market size or competitive scenario for that product.
Umang Vohra, Managing Director and Global CEO
I'm sorry, we can't give that detail due to the competitive nature of the product. ... the market size of that product could be, you know, anywhere upwards from $300 million-$400 million.
Answered
Medium priority
Whether generic filing will be subject to litigation or Para IV
Asked by Tushar Manudhane, Motilal Oswal Financial Services
Management directly confirmed it would be a Para IV filing.
Read the exchange
Question
With respect to one comment of generic filing, which applies, expected to do shortly. Will that be subject to litigation, or would it be more like a Para IV filing?
Umang Vohra, Managing Director and Global CEO
Yes, you could, you could expect that, yes, it would, it would be a para four filing.
Answered
High priority
Annualized U.S. generics revenue range
Asked by Tushar Manudhane, Motilal Oswal Financial Services
Management provided a specific quarterly guidance range.
Read the exchange
Question
considering $230 million U.S. sales, any ballpark range you would like to give in terms of the annualized generic for the U.S. generics?
Umang Vohra, Managing Director and Global CEO
I think we are guiding to 220-225 as a sustainable range, at least for the next quarter, going forward.
Partial answer
High priority
Plans for GLP-1 opportunity in diabetes, oral and injectable
Asked by Aman Vij, Astute Investment Management
Management answered for India but was vague on U.S. plans and declined to quantify market potential.
focused on India only initiallydeclined U.S. specifics
Read the exchange
Question
how are we placed to take the advantage of the upcoming GLP-1 opportunity. Will we be participating in both the oral and injectable form?
Umang Vohra, Managing Director and Global CEO
I think we will do sema. We definitely have plans for the oral version of the product. And if required, and based on our current understanding, if the market is there for an injectable, we will hopefully also try and introduce a product there.
Answered
Medium priority
Whether improving U.S. generics environment drove gross margin improvement
Asked by Kunal Dhamesha, Macquarie
Management directly addressed the question and explained multiple factors.
Read the exchange
Question
would you say that, you know, improving U.S. generics environment was one of the key drivers in this quarter in our sequential gross margin improvement?
Ashish Adukia, Global CFO
No. So it does contribute to the improvement, but it's a mixed bag in U.S. On certain cases in U.S., we've got volume improvement. ... Overall, the gross margin improvement is on account of a price, like I said, in India as well as in select products.
Answered
Medium priority
Whether U.S. contract traction is due to shortages or pre-buying, and sustainability
Asked by Kunal Dhamesha, Macquarie
Management explained the shortage-driven nature and gave a view on continuation.
Read the exchange
Question
is that on account of lot of shortages that you are seeing, or there is kind of pre-buying that is more driving that? What would be your assessment? So would it continue, let's say, beyond quarter three?
Ashish Adukia, Global CFO
the shortage situation, until there are new capacities that come up, will probably continue. ... At least for those product families, we are not seeing price erosion.
Evasive
High priority
Timing of Advair and Abraxane launches, first half next fiscal?
Asked by Damayanti Kerai, HSBC
Management did not confirm first half timing, citing FDA dependency.
deferred to FDA timingno commitment on timeline
Read the exchange
Question
if there are no incremental query, hurdle, et cetera, is it safe to assume that these opportunities will likely come in first half of next fiscal?
Ashish Adukia, Global CFO
Depends on the review cycle at the FDA. ... it's difficult to predict, but we are hoping that, you know, this comes as soon as it can.
Answered
High priority
Contribution of differentiated products to U.S. sales and profitability
Asked by Damayanti Kerai, HSBC
Management provided percentage of differentiated pipeline and confirmed U.S. EBITDA margin above company average.
Read the exchange
Question
can you just broadly indicate of the total U.S. sales, how much contribution are currently coming from the differentiated products, and how does the U.S. portfolio look in terms of profitability compared to the corporate templates?
Umang Vohra, Managing Director and Global CEO
about over 70%-75% of our pipeline in the U.S. today is differentiated. ... EBITDA for different, overall U.S., if you see, right, it is above the company average, EBITDA margin today.
Answered
High priority
Reason for higher U.S. guidance of $220-225 vs previous $200-215
Asked by Neha Manpuria, Bank of America
Management directly attributed the improvement to specific share gains.
Read the exchange
Question
has anything fundamentally changed quarter-over-quarter in the U.S., or this is just improvement that you're seeing in the base portfolio that is driving this higher U.S. guidance?
Umang Vohra, Managing Director and Global CEO
it's basically increased, slight increase in our albuterol shares, slight increase in the share of a few other product families. Also the share increase in Lanreotide.
Answered
High priority
Why margin guidance is conservative despite H1 margin of ~25%
Asked by Neha Manpuria, Bank of America
Management explained seasonality and mix changes that make H1 margins not fully sustainable.
Read the exchange
Question
are we expecting spend to go up? Is that the reason we're being conservative on the margin guidance, particularly given what we've seen in the first half?
Umang Vohra, Managing Director and Global CEO
the sustainable margins, the way we see it in this quarter, is in the range of 24%-25%. ... this quarter is very different. Hardly any anti-infective, and we know that there is some amount of anti-infective that comes in the winter months.
Quantitative claims vs filed numbers
| Claim | Management said | Filing | Verdict |
|---|---|---|---|
| India branded prescription and generic growth over 11% | 11% | 15% | Understated vs filing |
| U.S. generics sustainable range $220-225 million next quarter | 220 | 6,678 | Understated vs filing |
| India long-term growth CAGR around 12% | 12% | 15% | Understated vs filing |
| Revenue after knocking off QCIL is INR 6,490 crore | ₹6,490 cr | ₹6,678 cr | Understated vs filing |
| EBITDA margin guidance of 24% for full year | 24% | 26% | Understated vs filing |
Filed figures sourced from Screener.in. Claims within a small tolerance of the filing are marked “matches filing”.