Cipla Shares Surge 8% to Claim Top Nifty Gainer Spot Amid Overwhelmingly Positive Brokerage Reactions Post Q4 Earnings

Cipla Shares Surge 8.62 Percent on Positive Brokerage Views

Cipla's shares jumped more than 8 percent on Thursday, emerging as the top gainer on the Nifty index. The sharp upmove came despite the company's March quarter earnings declining by 55.32 percent. The decline in earnings was attributed to lower revenue from the North American market and higher expenses.

Key Highlights

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The stock opened with a gap-up of 2.61 percent and extended gains through the session. It has now risen for two straight trading sessions, gaining over 11 percent in this period. The NIFTY 50 stock rose as much as 8.62 percent to hit an intraday high of Rs 1,442.

Cipla reported a consolidated net profit of Rs 542.51 crore in the March quarter, compared with Rs 1,214.14 crore in the same period last year. Total revenue from operations stood at Rs 6,541.2 crore, compared with Rs 6,729.69 crore a year earlier. North America sales fell 26 percent to Rs 1,414 crore from Rs 1,919 crore in the corresponding quarter last year. However, "One India" sales rose 15 percent to Rs 3,007 crore from Rs 2,622 crore in the same period.

Citigroup maintained a buy rating and raised its target price to Rs 1,700. The brokerage noted that fourth quarter trends were steady, with about 15 percent growth in India and US sales at $155 million, broadly stable sequentially despite phase-outs. It also pointed to gross margin expansion on a quarter-on-quarter basis.

JPMorgan upgraded the stock to overweight with a target price of Rs 1,550. The brokerage noted that the upgrade factors in improved earnings visibility driven by complex US launches over the next two years and attractive valuations after the recent correction. It added that management has guided for a US exit run-rate of $1 billion in FY27, up from the current quarterly run-rate of about $155 million.

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HSBC Holdings maintained a hold rating with a target price of Rs 1,340. The brokerage said the fourth quarter results missed estimates and highlighted that margins guidance for FY27 factors in continued pressure from lanreotide supplies. It added that execution of new launches will be key to achieving the targeted US sales run-rate, while progress in the US business remains important for growth outlook.