Cipla stock jumps to all-time high; Nuvama raises target price, sees 18% upside

Cipla shares surged 2.5 percent in trade on March 11 to touch a fresh lifetime high of Rs 1,519 apiece, extending its rally. So far, in 2024, shares of the pharma major have jumped over 20 percent, as against a 3 percent rise in the domestic benchmark index, Nifty 50.

Nuvama Institutional Equities, a domestic brokerage, noted that currently, Cipla is aiming to transition from a pure-play pharma company to an integrated health player.

“It is increasingly engaging with start-up ecosystems to invest in different areas of oncology, obesity, mental health, wellness, genomics, etc. The company sees significant growth opportunities and is thinking beyond the pill by working on various aspects i.e. pill, nutrition, clinics and digital,” said Nuvama. This is likely to provide a leg up to its consumer health business.

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At 12 pm, shares of Cipla were quoting Rs 1,502 on the NSE, higher by 1.3 percent from the previous session’s closing price.

The brokerage added that Cipla’s focus on a differentiated portfolio has yielded results in the US (inhalers, peptides and gRevlimid); it expects to sustain a revenue run-rate of $1 billion. The confidence stems from upcoming five peptides launches in FY25E, complex products, and a robust pipeline of inhalers.

Brokerage view

Nuvama retained its ‘buy’ call on Cipla,  given its steady domestic franchise and robust US pipeline. The brokerage raised the price target to Rs 1,750 per share, up from Rs 1,600 apiece. This implies an upside of around 17.8 percent.

On March 1, the United States Food and Drug Administration (USFDA) inspected a manufacturing facility of subsidiary Cipla (Jiangsu) Pharmaceutical in Qidong, Jiangsu Province, China, from February 26 to March 1. The inspection concluded with zero Form 483 observations, Cipla said.

In a separate filing, the company told bourses that it has completed the transfer of its generics business. “The company has completed the transfer of Generics Business Undertaking as a going concern on a slump sale basis to Cipla Pharma and Life Sciences Limited, a wholly-owned subsidiary of the company on 1st March 2024,” Cipla said.

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