5 Minutes Read
Here’s why Cipla stock rallied over 3% on Wednesday
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
Listen to the Article (6 Minutes)
Summary
Investec’s coverage initiation signals growing investor interest and confidence in Cipla’s ability to navigate market challenges and capitalise on emerging opportunities. As the pharmaceutical landscape continues to evolve, Cipla remains well-positioned to sustain its growth trajectory and deliver value to shareholders.
Cipla, one of India’s leading pharmaceutical companies, saw an upsurge of over 3% in its stock value on Wednesday, following an initiation of coverage by brokerage firm Investec.
Investec’s analysis attributes the recent 10% decline from the 52-week high to several factors. Firstly, there is anticipation surrounding Amneal’s potential entry into the market with a competitive offering of Albuterol, an inhaler drug within Cipla’s portfolio. Additionally, muted performance in India during Q4 is also expected to have influenced market sentiment negatively.
Despite these challenges, Investec maintains an optimistic outlook on Cipla’s resilience and market positioning. They emphasise that Cipla’s dependency on Albuterol is relatively low, constituting only 7% of the FY24 EBITDA. Consequently, they anticipate a limited impact on EPS even in the face of new competition. Furthermore, Investec envisions the possibility of upgrades for FY25 and FY26.
Valuation-wise, Cipla appears to be trading favourably compared to its sector peers. At approximately 20 times the FY26 estimated PE, Cipla’s valuation stands below Investec’s sector coverage average of 26 times and domestic branded-focused names at around 32 times. This suggests that Cipla may present an attractive investment opportunity relative to its industry counterparts. The brokerage firm has a long fast call on the stock with a target price of ₹1,550 per share.
Headquartered in Mumbai, Cipla boasts a market capitalisation of ₹1,12,789.04 crore. The positive market response was evident as the company’s stock closed 3.92% higher at ₹1,399.50 on Wednesday. Over the past six months, Cipla has delivered impressive returns of over 20%, underscoring its resilience amidst fluctuating market dynamics.
Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout
3 Mins Read
Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter
Daily Newsletter
