Indian drugmaker Cipla beats Q1 profit view on strong demand; shares hit record high

By Kashish Tandon

HYDERABAD/BENGALURU (Reuters) -Cipla, India's third-largest generics drugmaker by sales, beat first-quarter profit estimates on Friday as it reported higher sales in its North America market, boosting its shares to an all-time high.

The company posted an 18.3% rise in consolidated net profit to 11.78 billion rupees ($140.8 million) for the quarter ended June 30, surpassing analysts' estimates of 11.10 billion rupees, as per LSEG data.

Cipla's shares jumped 6.7% to a record high of 1,600 rupees after the results.

Sales in North America grew 13% during the quarter, primarily driven by Cipla's respiratory drug Albuterol and cancer treatment drug Lanreotide.

"Cipla's rising market share for Lanreotide and Albuterol have led the U.S. revenue to beat our estimates," said Shrikant Akolkar, an analyst at Nuvama Institutional Equities.

Indian generics drugmakers have been benefitting from strong demand for their copycat versions of Bristol-Myers Squibb's blockbuster drug Revlimid since their launch in 2022, boosting sales in the U.S., a key market for domestic pharma companies.

Bristol Myers is now facing pressure from generic competition for Revlimid, once its top-selling drug.

Revenue from India, Cipla's second-biggest market, rose 10% to 28.98 billion rupees.

North America and India make up around three-fourths of the company's revenue.

Its overall revenue rose 7%, but fell short of analysts' expectations of a nearly 8% increase, mainly due to changes in the distribution model of its domestic trade generics business.

However, growth in Cipla's India business should return in the near term as the transition of its trade generics business to a new distribution model is now over, the company said.

($1 = 83.6950 Indian rupees)

(Reporting by Rishika Sadam and Kashish Tandon in Bengaluru; Editing by Sonia Cheema)