Cipla Q1 preview: May deliver strong Q1 show on better sales in US, India and South Africa

Drug maker Cipla is likely to report a net profit of Rs 390.4 crore for the first quarter of FY19, going by an average of estimates of analysts polled by Reuters.

The rise in the company's net profit will be led by improved sales in India and South Africa and some gain in market share for its recent generic launches in the US market.

Cipla had reported a net profit of Rs 408.8 crore for Q1 FY18.

The analysts polled by Reuters estimated the company's revenue to rise 18.21 percent on year to Rs 4,057.4 crore for the quarter under review.

Earnings before interest, tax, depreciation and ammortisation (EBITDA) is seen coming in at 18-20 percent.

"The US business should gain further momentum (on the back of ramp-up in generic asthma drug Pulmicort) and we expect the quarterly revenue run-rate at $115 million (from $100 million last year in Q1FY18)," brokerage Nirmal Bang said in a report.

"First quarter is also one of the better quarters for Cipla in the domestic market seasonally. We expect South Africa, Sahara and EM business to grow 12 percent YoY, flattish performance in API and other business and about 7 percent QoQ growth in Europe business," Nirmal Bang said.

The brokerage expects the company to post a sequential growth of 16 percent, 60 percent, 216 percent, respectively, in revenue, EBITDA and PAT.

"US revenue ($110 million) is expected to grow 10 percent YoY and 6 percent QoQ as launch of generic antiretroviral medication Sustiva, generic asthma drug Isuprel and full quarter of sales from generic antiretroviral Viread and generic chemotherapy induced naurse Aloxi are likely to offset base erosion," Edelweiss Research said in a report.

"India business is expected to grow 25 percent YoY, assisted by Basalgar launch and a favourable base. Expect South Africa to be driven by 9 percent appreciation in the ZAR," the research house said.

"We expect Cipla’s US revenue to grow at 13.5 percent CAGR over FY18-21 to $602 million. Consistent ANDA approvals (10-12 approvals per year) given clear FDA status at its manufacturing plants would drive this growth," ICICI Securities said in a recent report.

The brokerage expects Pulmicort, Aloxi, Isuprel, Dacogen, Nasonex, Cialis, Albuterol, among others, to be the key drivers for Cipla's US business.

Things to expect from management commentary

Commentary on the status of limited-competition opportunities like asthma medications Advair, Albuterol , Nasonex and chemotherapy injection Abraxane in the US will be key.