Cipla Results Analysis A Pharma Stock

For the third quarter ended 31st Dec 2008, the reduction in operating costs, helped the company post a better performance. The reduction in costs was also on account of the depreciating rupee which improved on account of the improved exports. Exports are booked at prevailing rates and hence the company stood to benefit.
OPM for Q3FY09 was at 23.42% compared to 16.82% in QoQ and 25.94% on a YoY. NPM was up at 16.65% compared to 11.18% on a QoQ and it came down from 19.07% on a YoY.
Cipla has formed two new partnerships in US and Canada. It has two drug launches on anvil – budesonide inhalers in Germany and Portugal and salbutamol MDI in Denmark and Portugal. Cipla has one of the widest product ranges, with a presence in about 65 therapeutic categories.
Currently, like many other Indian pharma companies, Cipla’s consignment too has been caught. Cipla’s export consignment to Peru was seized at Amsterdam in early Feb 2009. This has been valued at around US$30,000 and the company blames this on the conspiracy of the Big Pharma, to ensure that Cipla’s generics drug does not reach the markets. One does not know the truth behind the allegations but this is a real problem which Cipla and many others are currently facing abroad.
The company is expected to show pressure in the current quarter and one has to wait and see what impact the depreciating rupee would have on the margins. thanks