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Cipla Ltd

| Quarterly Financial Results Q3 FY 2025-26

NEUTRAL SENTIMENT

Report Source

⬤23rd Jan 26

Summary : Cipla reports Q3 FY26 results with strategic acquisitions, but profit impacted by one-off labor code costs and ongoing NPPA legal challenges.

Quarterly Report Analysis & Insights

Financial Disclosures

  1. Consolidated Total Expenses Q3 FY26: ₹6,111.80 Crores (Cost of materials consumed, Purchases of stock-in-trade, Changes in inventories, Employee benefits expense, Finance costs, Depreciation/amortisation, Other expenses).
  2. Consolidated Revenue from Operations Q3 FY26: ₹7,074.48 Crores (Pharmaceuticals: ₹6,746.40 Cr, New ventures: ₹381.48 Cr).
  3. Consolidated Revenue from Operations 9M FY26: ₹21,621.39 Crores.
  4. NPPA demand notices for alleged overcharge aggregating to ₹2,011 Crores (principal ₹863 Crores, interest ₹1,148 Crores). Company expects favorable outcome and has not made provisions.
  5. Paid-up equity share capital: ₹161.55 Crores.
  6. Other equity: ₹31,031.93 Crores (Audited as of 31-03-2025).
  7. Demand notices jointly addressed to Okasa Pharma Private Limited or Okasa Limited (related parties) for products manufactured by Okasa and marketed by Cipla.
  8. Both standalone and consolidated unaudited financial results are presented for the quarter and nine months ended 31st December 2025.

Corporate Overview

  1. India
  2. South Africa
  3. United States of America
  4. Netherlands
  5. United Kingdom
  6. Australia
  7. Mauritius
  8. Malaysia
  9. Belgium
  10. Brazil
  11. Algeria
  12. Sri Lanka
  13. Morocco
  14. United Arab Emirates
  15. Colombia
  16. China
  17. Mexico
  18. Ongoing legal challenges from NPPA regarding alleged overcharge on scheduled drugs.
  19. Impact of new Labour Codes on gratuity and leave liability.
  20. Pharmaceuticals manufacturing and marketing.
  21. New ventures in healthcare.
  22. Pharmaceuticals
  23. New ventures
  24. Acquisition of 100% stake in Inzpera Heathscience Limited for ₹110.65 Crores.
  25. Acquisition of perpetual rights to manufacture and market Galvus and Galvus combination brands for ₹1,107.28 Crores.

Risk Factors

  1. Persistent NPPA overcharge demand notices.
  2. New labor codes increase liabilities.
  3. Integration challenges for recent acquisitions.
  4. Intense competition in pharma market.

Key Drivers

  1. Acquired Inzpera, expanding healthcare portfolio.
  2. Secured perpetual rights for Galvus brands.
  3. Favorable resolution of NPPA legal issues.
  4. Strong revenue growth in core segments.

Auditor’s Report

  1. Unmodified review conclusion for consolidated financial results.
  2. Unmodified review conclusion for standalone financial results.
  3. Reliance on review reports of other auditors for 12 subsidiaries and an associate located outside India.

Board Commentary

  1. NPPA demand notices regarding alleged overcharge on scheduled drugs.
  2. NPPA demand notices for alleged overcharge (₹2,011 Crores total).
  3. Impact of new Labour Codes on gratuity and leave liability (₹275.91 Crores consolidated, ₹244.37 Crores standalone exceptional item).
  4. Acquisition of 100% stake in Inzpera Heathscience Limited for ₹110.65 Crores.
  5. Acquisition of perpetual rights for Galvus and Galvus combination brands for ₹1,107.28 Crores.

Corporate Governance

  1. Audit Committee reviewed and recommended the results to the Board of Directors.

Management Discussion & Analysis

Future Strategy

  1. Growth through strategic acquisitions in healthcare sector.
  2. Expanding product portfolio with new brand rights.

Performance Drivers

  1. Revenue from sale of products.
  2. Strategic acquisitions expanding product portfolio.

Risk Control Measures

  1. Company expects favorable outcome in NPPA matters, no provision made.

Critical Risks

  1. NPPA demand notices for alleged overcharge on scheduled drugs.
  2. Increased employee liabilities due to new Labour Codes.