In this article, we will discuss
- A Closer Look at Cipla, India’s Pharma Giant
- Cipla Share Price NSE: A Closer Look at the Company’s Scrip
- Factors to Consider Before Investing in Cipla in 2024
- Long-Term Outlook: What Does the Future Look Like for Cipla?
India’s pharmaceutical industry is closely tied to the healthcare sector, which is a prominent defensive market segment that tends to perform well across market cycles. While the demand for healthcare and pharmaceutical products constantly endures, individual stocks within the pharma sector may outperform or underperform based on company-specific factors and financial results.
So, even as different stocks move in and out of favour with investors and traders, Cipla, India’s pharma giant, is currently in focus. As retail participants continue to track the Cipla share price on the NSE and the BSE, it’s imperative to also account for various crucial factors before you decide to invest in the company in 2024.
A Closer Look at Cipla, India’s Pharma Giant
Cipla Limited is a global pharmaceutical company based in Mumbai, India. Founded in 1935 by Dr. Khwaja Abdul Hamied, Cipla has made significant contributions to the pharmaceutical industry, particularly in making medicines more affordable and accessible to people across the world. The company operates under the guiding principle of ensuring that no patient shall be denied access to high-quality medicine at affordable prices, a philosophy that has driven its efforts in various therapeutic categories including respiratory, antiretroviral (ARV), urology and cardiology specialities.
Cipla is also renowned for its pioneering work in the field of HIV/AIDS, where it dramatically reduced the cost of antiretroviral drugs and made life-saving treatments accessible to millions of people in developing countries. This move was a game-changer in the fight against the HIV/AIDS epidemic and established Cipla as a leader in social responsibility within the pharmaceutical sector.
With its presence in over 80 countries today, Cipla continues to focus on research and development (R&D) to cater to the unmet medical needs of patients worldwide. The company’s commitment to healthcare extends beyond its business operations, as it engages in various corporate social responsibility (CSR) initiatives aimed at improving health and education in underserved communities.
Cipla Share Price NSE: A Closer Look at the Company’s Scrip
Cipla reported quarterly earnings of over ₹6,600 crore in the third quarter of FY24 — which is its highest-ever earnings reported in any quarter. Despite this, analysts watching the Cipla share price on the NSE and the BSE suggest that demand for the stock has cooled down slightly. This slowdown follows a significant bullish run over the past few months.
In the previous year, the pharma stock witnessed a sharp rally of over 40%. This surge was sustained up to nearly mid-February — when the Cipla share price on the NSE hit its 5-year high at ₹1,457.75. However, this bullish run thawed recently, when the company’s share price dipped by a little over 2% following its record 5-year high.
Despite this minor dip, Cipla emerged as the top Valentine’s Day pick for some market experts. The pharma stock continues to have a buy signal from most analysts watching the Cipla share price on the NSE and the BSE. So, if you decide to add this stock to your near-term or long-term portfolio in 2024, you need to account for its opportunities and risks and make an informed decision.
Factors to Consider Before Investing in Cipla in 2024
If you’re tracking the Cipla share price on the NSE or the BSE and waiting for the right target to enter the market, it’s crucial to be aware of the following factors before initiating a position.
Key Opportunities for the Company
Cipla continues to be a promising buy because of the following factors:
Sustainable EBITDA Margins
Cipla is strategically positioning itself for robust growth and sustained profitability in the pharmaceutical sector, with a series of key opportunities outlined for the coming years. The company’s management has confidently set a sustainable EBITDA margin target of 24% for FY24. This projection builds on the momentum from Cipla’s strong performance in Q3FY24, with a 26.46% margin.
Improved National Presence
The company also plans to improve its presence in the Indian market by focusing on chronic prescriptions and aims to reach more patients in tier-2 to tier-6 cities. This approach is expected to strengthen Cipla's penetration in India significantly and promote sustained and expansive growth.
Inorganic Expansion and Growth Targets
Further, Cipla is eyeing inorganic growth through strategic investments in the prescription and consumer health segments in India. The company is targeting smaller acquisitions that are expected to become margin-accretive within a couple of years. On the international front, Cipla has identified five to ten core markets in Europe and the Middle East, with plans to transform at least two of these into significant revenue contributors.
New Therapeutic Ventures
Cipla is not just expanding its geographical footprint but also diversifying its therapeutic portfolio. The company is investing in three new therapy areas — obesity, mental health and oncology — anticipating that these sectors will witness substantial growth over the next five to ten years.
Major Risks to Watch Out For
Despite these upsides, traders watching the Cipla share price on the NSE and the BSE must account for the risks and limitations of this pioneering pharma company. The risks, while minimal when compared with the opportunities, are still material to your decision to invest in Cipla in 2024. They include the following:
No Major Upside Triggers
The absence of major upside triggers has been a point of concern. Despite Cipla's strong performance in Q3 with record revenue, the company does not currently have any triggers that could drive the stock price further upward.
Delayed Drug Launches
The company’s key drug launches in the US market have been delayed slightly. These delays are critical as they push back the commercial timelines for these drugs, potentially affecting Cipla's revenue and growth in the lucrative US market.
Delays in Plant Clearance
The lack of upside triggers is further compounded by delays in obtaining production clearances for some of Cipla’s Goa and Indore plants. Regulatory snags at these sites not only hinder the immediate availability of these drugs but also impact the overall opportunity size.
Long-Term Outlook: What Does the Future Look Like for Cipla?
Now that you know what the company’s upsides and risks are, you can make a more informed decision about the target Cipla share price on the NSE and the BSE. If you are considering a long-term buy, you need to also account for the company’s outlook in the coming years.
This will depend on how well the company manages its risks and leverages the strengths and opportunities that it currently has. For Cipla to keep doing well, it needs to obtain approvals for its plants in Goa and Indore quickly and launch its new drugs in the US market without further delays. How Cipla deals with these tough spots and uses its opportunities will be very important for its future.
That said, you need to perform your own analysis and decide if Cipla is a good addition to your trading or investment portfolio. The Samco trading app can help you with this because you can carry out thorough technical and fundamental analysis, study the pros and cons of the stock and even track its price and volume data. To access all these benefits and more, open a Samco trading account and log into the Samco trading app today.
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