Synopsis
Cipla shares jumped following Citi’s ‘Buy’ rating and a positive 90-day catalyst watch. The brokerage expects growth from potential U.S. approvals like gFlovent and gVentolin, as well as a rebound in its U.S. business. Domestically, Cipla’s performance remains strong, supported by its respiratory portfolio. Citi believes its profits have reached a low point and highlights attractive valuations for the Indian market.
ETMarkets.comCipla’s business in India is valued at 7.8 times FY26 revenue, compared to 8.5 times for Mankind.Shares of a pharmaceutical major Cipla rose 4% to reach its day high of Rs 1,409 on the BSE Monday after the international brokerage company Citi has placed the stock on a 90-day Catalyst Positive Watch while maintaining its ‘Buy’ rating and price target of Rs 1,700, an upside of 25.55% from current levels.
THE Wall Street the broker believes several near-term triggers could support the stock, including the likely approval of gFlovent of the Goa facility, which could spur growth in the American marketand the expected launch of gVentolin. Citi also noted that Cipla’s Nintedanib has captured nearly 50% market share in the US, while the company’s US operations are poised to see a revenue rebound after recent weakness.
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Domestically, the brokerage said Cipla’s India business continues to perform well, helped by a recovery in its respiratory portfolio. Citi also emphasized that a re-inspection of the Indore plant is necessary at any time and a favorable outcome as well as USFDA the selloff could serve as an additional catalyst for the stock. The brokerage added that easing geopolitical tensions had reduced concerns over commodity costs and margins.
According to Citi, Cipla’s profits have likely bottomed out following the gRevlimid-related decline. The stock is currently trading at 25x FY27E earnings and 21x FY28E earnings. With the Indian business contributing almost two-thirds of EBITDA, Citi believes Cipla offers attractive exposure to the domestic pharmaceutical market at a more reasonable valuation than several India-focused competitors.
He noted that Cipla’s India business is valued at 7.8 times FY26 sales, compared to 8.5 times for Mankind. Overall, the brokerage sees a favorable risk-reward profile, supported by upcoming U.S. catalysts, improving domestic business trends and attractive valuations.
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Cipla Q4 Overview The pharmaceutical major reported a 55% year-on-year (y-o-y) decline in its consolidated net profit at Rs 555 crore in the fourth quarter. The profit was compared to Rs 1,222 crore recorded in the fourth quarter of last year. The company’s operating revenue fell around 3% year-on-year to Rs 6,541 crore in the March quarter.
EBITDA fell 35% to Rs 997 crore from Rs 1,538 crore in the year-ago period, while EBITDA margin contracted sharply to 15.2% from 22.8%. For the full financial year ended March 31, 2026, Cipla reported a 2% year-on-year increase in revenue at Rs 28,163 crore, but a 26% year-on-year decline in net profit at Rs 3,879 crore.
Cipla shares are down by more than 6% in 2026.
(Disclaimer: The recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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