Cipla (CIPLA) Q3 25/26 earnings summary

Executive summary

• Q3 FY26 revenue was INR 7,074 crore, flat year-over-year, with India business up 10% YoY and strong chronic therapy growth, while U.S. revenues were impacted by lower Lenalidomide and lanreotide sales.

• Strategic launches included Afrezza and Mounjaro in India, exclusive marketing/distribution deals with Pfizer, and acquisitions of Inzpera Healthsciences and Esperer Onco Nutrition.

• North America saw Albuterol maintain #1 market share, but lanreotide supply was disrupted due to FDA observations; resupply expected in H1 FY27.

• Unaudited financial results for Q3 FY26 were approved, with financial statements reviewed and receiving an unmodified review conclusion.

• Exceptional item of INR 276 crore recognized due to increased employee benefit liabilities from new labour codes.

Financial highlights

• EBITDA margin was 17.7% for Q3 FY26, down due to lower generic revenues and product mix; EBITDA at INR 1,255 crore.

• Gross margin after material costs was 62.8%, affected by Lenalidomide decline and R&D/API purchases.

• PAT was INR 676 crore (9.6% of sales), down 57% YoY, impacted by a one-time labour code expense.

• R&D spend was INR 419–494 crore (7% of revenue), up 37.4% YoY, focused on filings and pipeline development.

• Net cash position at INR 10,229 crore; total debt at INR 489 crore as of Dec 31, 2025.

Outlook and guidance

• FY26 EBITDA margin guidance revised to around 21% due to lower-than-expected lanreotide and Lenalidomide performance.

• U.S. revenue guidance for FY27 will be revised downward due to lanreotide disruption, but new launches are expected to support growth.

• R&D spend expected to normalize to 5-6% of revenue, with some lumpiness based on project timing.

• Acquisition of perpetual rights to manufacture and market Galvus brands for INR 1,107 crore, effective Jan 2026, to strengthen diabetes portfolio.