This is a relatively detailed and informative interview with Umang Vohra of Cipla. Some of the interview questions are quite good. This interview actually gives one the sense of where CIpla is planning to go over the next few years.
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With Goa plant also facing observations and now these 8 observations for Pithampur plant, will
Cipla find it difficult to launch Advair by April as earlier planned??
Since someone bought it up, I was actually wondering why a company like Cipla finds it so difficult to pass such inspections. Are they negligent, or are the inspections just extremely demanding? Or is there some other issue that I am not aware of?
Surely in the light of the importance of these inspections, the company should do everything it could to make sure it passed without issue?
Also, is this the reinspection (audit?) that is referred to in the earnings call quoted above? As in “So, up to FDA, like they might need to reinspect the plant”? If so, it seems that Umang Vohra was not expecting this?
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Good results by Cipla for Q4. Looks like it is well poised til 2025 with both India and USA biz seeing good traction. Only caveat is that FDA issues should be managed well and shouldn’t go out of control.
Cipla Q4 and FY 23 ending concall highlights -
Full yr results -
Sales - 22753 cr, up 5pc ( up 11 pc adjusted for COVID products )
EBITDA - 5027 cr, up 22 pc
PAT - 2984 cr, up 13 pc
Q4 results -
Sales- 5739 cr, up 9 pc
EBITDA- 1174 cr, up 20 pc
PAT- 708 cr, up 12 pc
In Q4 -
India business (branded generics+trade generics+OTC) grew 16 pc adjusted for COVID sales
US business sales at $ 201 million, up 27 pc
SAGA (South Africa+ Africa general)business de grew
in Q4
R&D at 371 cr, up 15 pc yoy. Currently at 6.5 pc of sales
India OTC sales crossed 1000cr in FY 23 (their return ratios, in some time will be better than any Indian FMCG business)
FY24 geography wise sales break up-
India-9869cr
North America-5909cr
SAGA ( SA + Subsaharan Africa)-3166cr
Intl Mkts ( Europe + RoW )-3028cr
APIs-134cr
India branded growth (ex Covid) grew 13 pc vs 8 pc Mkt growth
Chronic share in India business improved by 300 bps to 59 pc vs 56 pc YoY
21 Indian Brands in top 300. Each of these are 100 cr plus brands
In trade generics, there are 08 brands clocking 50 cr plus revenues
Have licensed Novartis’s Diabetic combination drugs(Galvus) that clocked 250 cr+ revenues last yr for India
Also entered into an agreement to market Scapho (injectable) … a monoclonal antibody used to treat psoriasis for India
Acquired Endura Mass for India consumer business
Added 800 MRs in India
Three complex generic products in pipeline. Filing to commence in FY 24
FY23 Gross Margins at 64 pc
ROIC for FY23 at 23 pc
EBITDA margins at 22 pc
Full yr EBITDA and ROIC includes high RM prices in first 8-9 months of FY23
Gross Debt at 783 cr
Should see significant growth in US business in FY 24. $ 190-200 million should be the trajectory for US base business. This translates to a sale of 6260-6560 cr annual sales vs 5909 cr in FY 23
India OTC business is skewed towards summer months
Expect Advair launch in 12+ months in US
All big products for US Mkts to be filed from 2 sites to de-risk the business
Investing heavily in respiratory and peptides portfolio for next 3 yrs
India business to see impact of price hikes taken by the company in Q1
Continue to be bullish on Galvus sales going fwd
Another 200 or so MRs to be added this year
Revlimid numbers are already in the company’s US business performance
Albuterol is growing well in US
Cipla holding 18 pc mkt share of Lanreotide Injection
Strong growth in Tier-2 to 6 towns in India specially in Respiratory and Anti-Infectives
Aim to hit 22 pc EBITDA margins in FY 24 as well
Simbicort Inhaler to be filed by Q4 of FY 24
Respiratory revenues from US at around 1400 cr range vs total US sales of 5900 cr
SAGA mkts to show some growth in FY 24 plus improved margins
Current cash balance around 5500 cr. Aim to invest most of this in India business
Disc: Hold a small tracking position… mostly for trading purposes unless US Mkt’s pricing pressures go away ( US, by the way is reporting highest drug shortages since 2012-13 ) or they end up acquiring some good India focussed Assets with the 5000 cr+ cash they have on the books
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I understand that Cipla in not facing major pricing pressure due to niche portfolio. Any insights you got from con call regarding pricing pressure for Cipla portfolio.
There was no direct question on that. But their confidence on maintaining at least $ 190-200 million base US business did, in a way indicate that their portfolio is not facing too many pressures
Plus the drug shortages in US are at 10 yr high. So …maybe we can take a leap of faith here
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Good set of numbers from Cipla
Revenue +14%
EBIDTA +25%
PAT +32%
US revenue run rate of 230M USD - Up 18%
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