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CapitalVia Global
Cipla (Long)
Target: ₹818.00
CMP: ₹758.35
Cipla focuses on novel formulations for production and has a wide variety of pharmaceutical products. They sell prescription medications, bulk drugs, pesticides, animal products, a wide variety of food and drinks, baked goods, products for oral hygiene, detergents, room fresheners and products for personal care.
According to the recent investor presentation of the company, Cipla aims at digital penetration and maintaining the growth. The company has even stated that in order to broaden access and optimise demand trends, the company is embracing digital transformations for patients and channel connections and is aggressively diversifying sources of essential active pharmaceutical ingredients, intermediate and key starting material and maintaining adequate inventory levels.
The company has good capacity to repay debt as the firm has a low debt-to-EBITDA ratio, which is 0.74 times along with a strong ability to generate cash from core activities. It has reported strong quarterly results with q-o-q growth in quarter ended September (₹4,972.58 crore) rising 16.26 per cent.
Hence, we recommend going long on CIPLA with a target price of INR 818.00.
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