Indian pharma major Cipla is looking at a high-risk recovery plan for FY27, after a tough fourth quarter, that saw its consolidated net profit plummet 54.6% to ₹5.55 billion. The decline in earnings was primarily driven by a 26% year-on-year decline in North America revenues to ₹14.14 billion, as the company faced intense generic competition and a lack of high-margin assets. Performance was further hit by a ₹420 million impairment charge and a suspension of sales of key cancer drug Lanreotide due to regulatory issues at a partner facility. These setbacks notwithstanding, the company continued to see the domestic market as a bright spot with a 15% growth to ₹30.07 billion.
To address the U.S. slowdown, Managing Director and Global CEO Achin Gupta has laid out an aggressive roadmap to reach $1 billion annual revenue run-rate in the U.S. by the end of FY27. The strategy depends on a series of key launches including a generic version of asthma inhaler Ventolin, in which Cipla has 180 days of market exclusivity. Management expects at least two of these new products to be $100 million annual revenue drivers. There are three more respiratory approvals coming and a big peptide asset.
While the reported EBITDA margin came in at 14.6% dragged by the higher R&D and manufacturing costs in the US, Cipla expects sequential recovery. The company has guided for EBITDA margins of 18.5% – 20% in FY27 supported by strong net cash position of over ₹10,500 crore. Diversification to its New Jersey facility and scale-up of complex generics is expected to help Cipla tide over the current regulatory headwinds and get back on its long-term growth path in the regulated markets.
