This leading drug maker is moving northwards while the market is moving southwards. Know why?

In Q3FY22 Cipla beat the estimates with a decent revenue growth YoY and maintained strong momentum in key markets such as India, the US and South Africa.

Leading drug maker Cipla has announced its Q3 results a few days back. Ahead of the results, shares of the company got an upward momentum and gained 3.5 per cent in three trading days. Post-result, that is today it gained a decent 2.2 per cent that too when the overall market sentiment is bearish. 

Since last Friday Nifty is down more than 2.5 per cent, whereas Cipla is moving northwards. 

Q3 earnings report:   

On a consolidated basis, Cipla revenue grew 6 per cent to Rs 5,479 crore on a YoY. This is due to strong traction in major revenue driver One-India (contributes 46 per cent of total revenue) and US business (contributes 20 per cent of total revenue). Overall One-India business grew by 13 per cent YoY led by sustained momentum across core therapies and traction in flagship brands and a modest contribution from the covid portfolio. 

US business got a robust momentum in core formulation business with YoY growth of 7 per cent in USD terms and strong traction in the respiratory portfolio with YoY growth of 36 per cent in USD terms.

EBITDA declined 3 per cent to Rs 1,243 crore on YoY but 1.4 per cent up QoQ and the corresponding margin is 22.7 per cent, contracting 210 bps on YoY but improving 50 bps QoQ. This margin improvement is due to cost optimization and mix improvement in the US. 

Net Profit declined 2.6 per cent to Rs 729 crore on YoY. The net profit margin is 13 per cent which got contracted 400 bps on YoY. 

At 2.45 PM, Cipla was trading at Rs 925, up by 2.2 per cent for the day.