Cipla Ltd — Q3 FY24
Cipla delivered a strong Q3 FY24 with revenue of INR 6,544 crore (+14% YoY) and EBITDA margin of 26.3%, driven by market-leading growth in India (+12%), an all-time high US reve...
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.
58%Questions answered3Evaded / deflected12Questions auditedContradictedNumbers vs filing
Partial answer
High priority
Reason for delay in Abraxane filing from alternate site and timeline change.
Asked by Tushar Manudhane, Motilal Oswal Financial Services
Acknowledged delay and route but did not commit to a specific approval timeline.
no specific timeline givenconditional on inspection
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Question
So just clarity on Abraxane, if you could just highlight, any particular reason for, delay, rechanging the plan as far as filing from the alternate site is concerned. And secondly, if it is so, then, it would be again, subject to the re-inspection of Goa facility. So accordingly, is there any change in timeline as far as the approval is concerned for Abraxane?
Umang Vohra, Managing Director and CEO
I think the fastest route that we are guiding is, the fastest route is an approval from Goa. Because, you know, because of the fact that we might have to do clinical studies if we transfer the product to another site, et cetera, the process of getting a reapproval is significant.
Evasive
High priority
Market size and competition for the peptide asset launching Q1 FY25.
Asked by Tushar Manudhane, Motilal Oswal Financial Services
Refused to quantify market size or competition, citing dynamic market.
no number givenvague 'fairly significant'
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Question
Just if you could share the market size for the product and if there are any existing number of players for the product in the market?
Umang Vohra, Managing Director and CEO
Well, as of now, Tushar, we feel we are the first, we will be the first, generic, if we are given approval for it. The market size is fairly significant.
Evasive
High priority
Strategy for Lanreotide after orphan drug exclusivity expiry in Sep 2024.
Asked by Amey Chalke, JM Financial
Did not clarify strategy or whether they would launch a generic; deflected to indication nuances.
uncertainty about exclusivity scopeno clear strategy
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Question
My first question on Lanreotide, there is an orphan drug exclusivity expiry somewhere in September 2024. So what is our strategy there? Are we going to launch generic as well instead of, promoting 505(b)(2), or, we will wait for, other generic players to enter this plan?
Umang Vohra, Managing Director and CEO
I'm not so sure that the orphan drug... I mean, I think the orphan drug expiry is with reference to certain indication. I think, so, I'm not sure that that holds up the generic for other indications that are already gen- that are, for the patents have already expired.
Answered
High priority
Advair filing timeline and need for additional studies if transferred to CMO.
Asked by Damayanti Kerai, HSBC Securities and Capital Markets India Private Limited
Clearly answered no additional studies needed and confirmed mid-FY25 filing timeline.
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Question
Umang, can you clarify your comment on the Advair opportunity? So you're saying, you're looking to file it by mid of FY 2025 from alternate site, and also want to understand, the way for approval, if you transfer it to a CMO site, you might require to do some clinical trials, et cetera. For Advair, is there any such requirement, for additional studies if you transfer to a different site?
Umang Vohra, Managing Director and CEO
No, we don't. No, we don't think so. I don't think any additional studies are required for Advair, and your what you picked up on the timing is correct.
Partial answer
High priority
Risk to Albuterol market share from Indore warning letter and recall implications.
Asked by Neha Manpuria, Bank of America
Acknowledged submission but did not quantify risk or timeline for market share recovery.
no commitment on market share recoverydeferred to FDA decision
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Question
Do you think there's a risk to the Albuterol market share that we have now because of the warning letter? Is that something that we should be concerned about? And, you know, have you addressed the... Or, do you think the FDA expects you to recall Abraxane, given the way they've mentioned it in the warning letter?
Umang Vohra, Managing Director and CEO
So on Albuterol, Neha, I think, we have submitted revised data to the FDA, and of course, the FDA has to make its determination post our response of the warning letter. ... The company believes that, you know, we do not have an issue with the product.
Answered
High priority
Risk to Advair opportunity from innovator's list price cut.
Asked by Surya Patra, PhillipCapital
Provided net price estimate and explained that list price cut may not fully reflect net price impact.
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Question
So, given the recent sharp price cut, list price cut by the innovator, so, whether this is a kind of risk to the kind of a potential opportunity, what we have been targeting in case of Advair?
Umang Vohra, Managing Director and CEO
I think, you know, the issue with the generic market, Surya, is that the innovators price cut, you know, matters, but in the end, it is the net price that a customer is buying at. ... our estimate of where, you know, the Advair price is somewhere right now at around the $30 per inhaler mark, as a net price.
Answered
Medium priority
Reason for decline in depreciation and amortization expense YoY.
Asked by Bino Pathiparampil, Elara Capital
Clearly attributed decline to prior year impairment and noted flat to declining trend.
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Question
I can see that your total depreciation and amortization expense has come down for the quarter, as well as for the nine months, year-over-year. What is leading to this decline?
Ashish Adukia, CFO
We had some impairment last year, Bino, which has led to the higher depreciation that you see in the previous year. But, but generally, it is, it's a flat to declining trend of depreciation.
Evasive
Medium priority
Are peptide assets 505(b)(2) or substitutable generics?
Asked by S. Mukherjee, Nomura
Did not provide any detail on the mix or which assets fall into which category.
vague 'mix'no breakdown
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Question
Among the peptide assets that you talked about, are they 505(b)(2) or substitutable generics?
Umang Vohra, Managing Director and CEO
They're a mix, time.
Partial answer
Medium priority
Current US pricing environment and whether pressure is easing.
Asked by Aejas Lakhani, Unifi Capital
Gave a qualitative view but no quantitative data on pricing pressure magnitude.
no specific datageneral seasonal comment
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Question
I just want to get a sense of the US and the pricing professionals in the US, and if you could double-click into a little more about how the regulator is thinking there, how are the buyer group, groups thinking? Is the pressure easing or is it, you know, the same like you suggested last quarter?
Umang Vohra, Managing Director and CEO
Well, there's not too much difference quarter-on-quarter. ... we typically see in quarter one of every year ... there is always more number of price challenges compared to the rest of the year. But as of now, we have not seen anything untoward.
Answered
High priority
Sustainability of gross margin expansion and outlook for FY24.
Asked by Nitin Agarwal, DAM Capital
Confirmed sustainability and attributed to pricing and mix, with no red flags.
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Question
We've seen a reasonable expansion in our gross margins over the last couple of quarters. Is there anything which is not sustainable you want to call out, you know, in terms of the gross margin, especially for this quarter? 66% almost, we are almost, it's amongst the highest we've done in a while.
Umang Vohra, Managing Director and CEO
No, I think it's a combination of pricing. ... It's likely to sustain the gross margin levels that we talked about. That's the whole idea. We are pushing for sustenance or even better gross margin.
Answered
High priority
Change in US specialty strategy after Tramadol and Pulmazole setbacks.
Asked by Nithya Balasubramanian, Bernstein
Clearly articulated shift to in-house development and avoidance of approval risk.
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Question
On U.S. specialty, Umang, I think we saw that Tramadol didn't work out, and more recently, Pulmazole also, you've backtracked in terms of what you're thinking about it for the U.S. So broadly stepping back, how are you thinking about U.S. specialties? Is it still part of your long-term growth strategy? What has changed, if anything?
Umang Vohra, Managing Director and CEO
I think it's better that, you know, that we focus our attention on generating these assets from within and be content with the fact that no one asset will be higher than INR 50 million or so, and try to build a portfolio. ... I don't think we want to take any more approval risk.
Partial answer
Medium priority
Sustainability of lower other expenses and cost efficiency programs.
Asked by Kunal Dhamesha, Macquarie
Claimed sustainability but did not provide details on cost efficiency programs.
no specific breakdowndeferred to offline
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Question
So just continuing on my last question about the other expenses, I know we had expected that the other expenses might move up in the second half of the year 2024, at least in quarter three, we have not seen other expenses excluding R&D. Right, so is it more, we can say, this quarter phenomena, or are we continuing to run cost efficiency programs, which is now starting to kick in?
Ashish Adukia, CFO
No, we can see, like I said, this is a sustainable number, okay? And more specifically, we can unpack the numbers and discuss.
Quantitative claims vs filed numbers
| Claim | Management said | Filing | Verdict |
|---|---|---|---|
| Gross margin 66% this quarter | 66% | 26% | Overstated vs filing |
Filed figures sourced from Screener.in. Claims within a small tolerance of the filing are marked “matches filing”.