Cipla Gets ‘Reduce’ Tag from Emkay, Share Price Target Lowered To Rs 1,500 - Here's Why

Brokerage firm Emkay Global has downgraded Cipla Ltd. to a ‘Reduce’ rating, setting a target price of Rs 1,500, slightly below the current market price (CMP) of Rs 1,514. The revision reflects Emkay’s caution over Cipla’s long-term growth potential, which is driven by a weakening domestic business and high uncertainty around upcoming US drug launches.

Core Domestic Business Shows Sluggish Growth
According to Cipla’s FY25 annual report (AR), its core domestic branded prescription business—excluding the in-licensed portfolio—grew by just ~6%. Emkay notes that this performance validates its prior estimates and undermines the company’s ability to achieve low double-digit domestic growth.

Cipla’s domestic sales, where the core branded segment contributes two-thirds, are struggling due to multiple headwinds:
“Cipla’s domestic business weakness is a multi-faceted challenge,” Emkay said in its report.

These challenges include:
Acute therapy portfolio underperformed the Indian Pharma Market (IPM), registering a mere 4% CAGR over three years.
Tail brands (outside top 50) posted only 2% CAGR in the same period.
A broad-based loss in IPM market share, except in respiratory, with a notable ~30bps metro share loss between FY22-25.
The rise in chronic share to 61.5% by FY25 has not translated into chronic outperformance.

Meanwhile, Cipla Health, the consumer wellness arm, saw a margin expansion with EBITDA margins improving to ~15% in FY25 from ~12% in FY24.

US Business Faces Approval Uncertainties
While Cipla posted its highest-ever US sales in FY25, Emkay expects the performance to remain flat through FY27, citing uncertainties in inhalation product approvals.

The company is betting on capacity unlocking at its MDI and DPI facilities in the US (Fall River and Long Island units). Key product filings include gSymbicort and gAdvair, but their approval timelines remain uncertain, especially after CRLs (Complete Response Letters) were issued to other filers for similar products.

“The path to approval for Cipla is likely to be long-winded, with the added complexity of a site transfer,” Emkay cautioned.

In addition, Cipla expects to file its first oligonucleotide ANDA and initiate first-in-human trials for a flagship biosimilar in FY26, in partnership with Kemwell Biopharma.
 

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Cipla Share Price Target 

“We reiterate our anti-consensus REDUCE with a Mar-26E TP of Rs1,500,” the report concluded.

Despite Cipla’s optimistic commentary, Emkay believes its FY27 estimates—which are already lower than Street consensus—may still be at risk. The brokerage warned that any delays in US approvals or further underperformance in the domestic segment could lead to downward revisions.
 

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