INSUBCONTINENT EXCLUSIVE:
NEW DELHI: Shares of Cipla on Wednesday got a shot in the arm as the drugmaker swung back into profit
The stock went up as much as 7.8 per cent to Rs 564.90 this morning -- its biggest intraday percentage gain since February 8
The company on Tuesday posted Q4 profit of Rs 179 crore ($26.24 million) against a loss of Rs 61.79 crore last year
Global brokerage firm HSBC said Cipla remains its preferred name amid ongoing sectoral headwinds
It has maintained a 'buy' rating on the stock
However, it has lowered the target price to Rs 620 from Rs 700 earlier.
"Expect the margin expansion story to continue on operating leverage
driven by US sales ramp-up, better profitability in markets like Europe, and ongoing cost control initiatives
We factor in about 245 bps improvement in core EBITDA margins over FY18-20," it said.
Deutsche Bank (DB) believes that an increase in RD
costs and limited scope for cost savings will cap improvement in EBITDA margin trajectory
Citi remains positive on Cipla's ability to outperform most peers on earnings traction, given its relatively lower exposure to the US and
improving quality of launches in the market
It has cut the target price to Rs 650 from Rs 680 earlier, maintaining 'buy' rating.
With improving sales and margins outlook, Cipla is best
placed among largecap pharma stocks, Macquarie analysts said
The brokerage house has lowered the target price to Rs 636 from Rs 670 and has maintained 'outperform' rating on the stock.
A total of 24 of
39 brokerages rate the stock 'buy' or higher, 12 'hold' and 3 's ell' or lower while their median target price is Rs 645, showed Thomson
Reuters data.
At the time of writing this report, the stock traded at Rs 546.65 on the NSE, up 4.32 per cent
