The brokerage believes a series of near-term triggers in the US market could support further upside for the stock. These include the potential approval of generic Flovent (gFlovent), the launch of generic Ventolin (gVentolin), and Cipla’s growing presence in the Nintedanib market, where its market share is approaching 50%.
Citi said that the company’s recent earnings performance was aided by better-than-expected margins, which were the key driver behind the earnings surprise.The brokerage also said that Cipla’s India business continues to perform well, supported by a recovery in the respiratory segment. Domestic operations remain steady and contribute nearly two-thirds of the company’s EBITDA.
Another key catalyst, according to Citi, is the re-inspection of Cipla’s Indore manufacturing facility. A favourable outcome and potential USFDA clearance could provide a significant boost to investor sentiment.
On valuations, Citi said that the stock trades at 25 times FY27 estimated earnings and 21 times FY28 estimated earnings. Despite the premium, the brokerage believes the current valuation remains attractive and offers better domestic exposure compared to some of its more richly valued peers.
