Cipla Reports 39% Profit Drop Amid North American Sales Slump

The pharmaceutical company Cipla Limited reported a 39.2% year-on-year decline in consolidated net profit for the first quarter of FY27, falling to Rs 789.05 crore from Rs 1,297.91 crore. While the company achieved record quarterly revenue of Rs 7,119.28 crore, profitability was undermined by a 21% revenue drop in North American operations and a 14.7% increase in total expenses. The U.S. business revenue fell to $162 million, hampered by the absence of two key products, lenalidomide and lanreotide.

Offsetting these losses, Cipla's India business reached its highest-ever quarterly revenue of Rs 3,452 crore, representing 12% growth, while the One Africa business grew 12% to Rs 977 crore. Despite the profit dip, the company's shares rose 3.7% on the NSE to an intraday high of Rs 1,444.80. Analysts offered mixed reactions: Jefferies and Choice Institutional Equities remained cautious over cost increases, while Motilal Oswal raised earnings estimates based on the growth in India and South Africa.

CEO Achin Gupta maintained full-year FY27 guidance, targeting an EBITDA margin of 18.5-20%. He pointed to a promising pipeline, including generic Ventolin and Dapagliflozin, to drive sequential growth. Addressing potential U.S. tariffs on generic products proposed by Donald Trump, Gupta noted that 35-40% of the company's manufacturing for the U.S. market is already based within the United States, positioning the firm to adapt to trade policy changes.