Cipla shares rose 4% as Citi registered the stock on a 90-day catalyst clock. What drives optimism?
The Wall Street brokerage believes several near-term triggers could support the stock, including the likely approval of gFlovent at its Goa facility and the expected launch of gVentolin, which could boost growth in the US market. Citi also noted that Cipla’s Nintedanib has nearly 50% market share in the U.S. and that the company’s U.S. business is expected to see a sales rebound after recent weakness.
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On the domestic front, Cipla’s India business continues to perform well on the back of recovery in its respiratory portfolio, the brokerage said. Citi also emphasized that re-inspection of the Indore plant is scheduled at any time and a favorable outcome along with USFDA clearance could act as a further catalyst for inventory. The brokerage added that concerns about raw material costs and margins have eased as geopolitical tensions ease.
According to Citi, Cipla’s profits likely bottomed out due to gRevlimitid-related declines. The stock currently trades at 25 times FY27E earnings and 21 times FY28E earnings. With India operations accounting for nearly two-thirds of EBITDA, Citi believes Cipla offers attractive exposure to the domestic pharmaceutical market at a more reasonable valuation than several of its India-focused peers.
Cipla’s India business is valued at 7.8 times FY26 revenue, while Mankind’s is valued at 8.5 times. Overall, the brokerage sees a favorable risk-reward profile with improving domestic business trends and attractive valuation, supported by upcoming U.S. catalysts.
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Cipla Q4 Snapshot
The pharma major reported fourth-quarter consolidated net profit of Rs 555 crore, down 55% year-on-year. This was compared to the operating profit of 1.222 trillion won in the fourth quarter of last year. The company’s operating revenue for the March quarter stood at Rs 6,541 crore, down around 3% year-on-year. EBITDA declined 35 per cent to Rs 997 crore from Rs 1,538 crore in the year-ago period, while EBITDA margin declined sharply from 22.8 per cent to 15.2 per cent. For the full financial year ended March 31, 2026, Cipla reported revenue at Rs 28,163 crore, up 2% year-on-year, but net profit at Rs 3,879 crore, down 26% year-on-year.
Cipla shares are down over 6% in 2026.
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