By Kashish Tandon
BENGALURU (Reuters) -Cipla, India’s third-largest generic drugmaker by sales, posted a bigger-than-expected rise in second-quarter profit on Friday, boosted by strength in its key domestic and North American business.
The company’s consolidated net profit climbed 43.4% to 11.31 billion rupees ($135.90 million) in the quarter ended Sept. 30, beating analysts’ average estimate of 9.75 billion rupees, as per LSEG data.
Total revenue from operations rose nearly 15% to 66.78 billion rupees, led by a 13.4% growth in its mainstay pharmaceutical business, said Cipla, which makes generic respiratory and cancer drugs along with consumer-branded products such as pain reliever Omnigel.
Sales in North America climbed nearly 32%, while its other key markets including India and South Africa posted a 10% and 3.7% growth, respectively.
Higher market share in cancer drugs Revlimid and Lanreotide and lower price erosion have helped Cipla’s sales in the North American market, analysts said.
“The strong Cipla numbers have set a positive tone for the large pharma results for the remainder of the quarter,” said Shrikant Akolkar, an analyst at Asian Markets Securities, adding that gross margins also benefitted from falling raw material costs.
Meanwhile, its domestic sales were boosted by price hikes and the addition of medical representatives, who promote and sell pharmaceutical products to healthcare professionals.
Cipla’s founding family has been keen to sell their 33.4% holding entirely.
India’s Torrent Pharmaceuticals are in talks with private equity funds, including CVC Capital Partners and Bain Capital, to raise up to $1.5 billion to bid for Cipla, Reuters reported last month.
If the deal works out, it would be the largest in the Indian pharma sector, analysts said.
Cipla’s shares jumped as much as 4.1% after the results and were up 1.9%, as of 3:20 p.m. IST.
They have risen nearly 17% in the September quarter, compared with a 12% rise in the Nifty Pharma index.
Peer Dr Reddy’s Laboratories is also scheduled to post its quarterly results later in the day.
($1 = 83.2210 Indian rupees)
(Reporting by Kashish Tandon in Bengaluru; Editing by Eileen Soreng)
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