1QFY27: Weak emerging market sales growth Quick Note

Research evidence excerpt

1QFY27: Weak emerging market sales growth Quick Note

Global Markets Research

Cipla CIPL.NS CIPLA IN 24 July 2026

EQUITY: HEALTH CARE & PHARMACEUTICALS

Rating1QFY27: Weak emerging market sales growth Remains Buy

Target price INR 1,510 RemainsQuick Note

Closing price INR 1,415 22 July 2026

1QFY27: Missed our estimates

Cipla’s 1QFY27 sales/EBITDA/PAT were 3%/11%/19% below our estimates. The revenue

miss was across its key markets, i.e., India, South Africa and North America. The revenue Research Analysts

growth in India and South Africa was much weaker than we expected. In India, excluding India Pharmaceuticals

the impact of partnership agreements and acquisition, the growth was ~7% y-y with muted Saion Mukherjee - NFASL

2% y-y growth in the consumer segment. Sales in South Africa declined by at least 8% y- saion.mukherjee@nomura.com

y, by our estimate, due to loss of tender. Gross margin contracted 626bp y-y and came in +91 22 403 74184

186bp below our estimate. The y-y contraction was primarily due to lower contribution Kushal Chovatia - NFASL

from high-margin products gRevlimid and lanreotide injection. The miss in EBITDA margin kushal.chovatia@nomura.com

vs our estimate was due to lower-than-estimated branded market sales, higher raw +91 22 403 74013

material and freight costs due to the West Asia conflict and somewhat higher inventory

write-off charges during the quarter. R&D spending increased 12.5% y-y (at 6.8% of

sales), with the company pursuing select opportunities in complex generics (respiratory

and injectables) and biosimilars. EBITDA margin missed estimates by 156bp. The

company, however, retains its FY27E EBITDA margin guidance at 18.5-20.0%. This

compares to our estimate of 19.4%.