Cipla Q2 results: Net profit plunges 35% to Rs 878 crore, revenue down 2.4% YoY; stock falls

Earnings before interest, tax, depreciation and amortisation (EBITDA) declined 26.8 percent to Rs 1,388 crore from Rs 1,895 crore a year earlier. EBITDA margin contracted sharply to 18.7 percent from 25 percent, a decline of 630 basis points. Cipla shares were trading 0.6 percent lower at Rs 1,347 apiece in afternoon trade on Tuesday, following the announcement of the company's quarterly earnings.

Cipla's India business emerged as a key growth driver during the September quarter, with revenue rising 12 percent year-on-year to Rs 3,516 crore from Rs 3,146 crore. The company said its One-India business recorded its highest-ever quarterly sales. However, North America revenue declined 19 percent to Rs 1,643 crore from Rs 2,039 crore a year earlier. The business generated quarterly revenue of $172 million.

The company's One Africa business reported revenue of Rs 1,171 crore, down 1 percent year-on-year. Within this segment, South Africa revenue declined 3 percent to Rs 872 crore, although Cipla said its South African private business grew 1.3 times faster than the market. Revenue from emerging markets and Europe remained flat at Rs 967 crore, despite geopolitical uncertainties. Meanwhile, revenue from active pharmaceutical ingredients (API) and other businesses plunged 59 percent to Rs 107 crore from Rs 259 crore.

Cipla reported research and development expenditure of Rs 423 crore during the quarter, representing 5.7 percent of sales. The investments were primarily directed towards product filings and key development programmes. The pharmaceutical company maintained a strong net cash position of Rs 9,823 crore. Its debt primarily comprised lease liabilities and working capital requirements.