Cipla jumps 7% as JPMorgan upgrades stock, Citi raises target price
Sarthak Kumar
Cipla shares surged nearly 7% on Thursday as brokerages turned increasingly optimistic on the pharma major’s medium-term growth outlook despite a weak Q4FY26 earnings performance announced a day earlier.
The stock rose as much as 7% to ₹1,432.1 on the NSE before trading around ₹1,416 in late morning deals, with investors cheering positive management commentary around the US business pipeline and future earnings visibility.
The rally came after global brokerages JPMorgan and Citi issued bullish notes following the company’s earnings announcement and management interaction.
JPMorgan upgraded Cipla to “Overweight” and raised confidence on the stock’s earnings trajectory over the next two years, assigning a target price of ₹1,550.
The brokerage said the upgrade was driven by improving earnings growth visibility supported by complex US launches and attractive valuations after the recent correction in the stock.
According to JPMorgan, Cipla management guided for a US exit run-rate of $1 billion in FY27, a significant jump from the current quarterly run-rate of around $155 million.
The brokerage also highlighted a strong upcoming product pipeline, including generic versions of Ventolin, Advair and Symbicort, along with select peptide opportunities.
JPMorgan added that the pipeline now carries more tangible execution milestones such as approvals in hand, plant inspection completion and defined launch timelines, increasing confidence around future growth execution.
The brokerage noted that Cipla currently trades at a discount of around 5–10% to peers such as Dr Reddy’s Laboratories and Lupin based on FY28 estimated earnings multiples.
Meanwhile, Citi maintained its “Buy” rating and raised its target price to ₹1,700.
Citi said Q4 operational trends were relatively healthy despite headline pressure on profitability. The brokerage highlighted around 15% growth in the India business, stable US sales despite the phase-out of products such as gRevlimid and Lanreotide, and sequential gross margin improvement.
The brokerage added that the EMEU and API businesses were temporarily impacted due to geopolitical and logistics disruptions, which could normalise in coming quarters.
Citi also pointed to positive forward-looking indicators from the management commentary, including expectations of double-digit growth in India, stronger US sales momentum and improved pipeline visibility for FY27.
The brokerage further noted that Cipla’s FY27 EBITDA margin guidance of 18.5–20% already factors in rising input costs, reducing downside concerns.
CIPLA Q4 RESULTS
For Q4FY26, Cipla reported consolidated revenue of ₹6,451.2 crore, down 3% year-on-year, while net profit fell 54.6% to ₹554.6 crore. EBITDA declined 38% YoY to ₹955 crore, with EBITDA margin contracting to 14.6% from 22.8% a year ago.
On an ex-impairment basis, EBITDA stood at ₹997 crore with margin at 15.2%, which was in-line with street estimates.
The board also approved a final dividend of ₹13 per share for FY26.
Despite the weak quarterly print, the Street appears to be focusing more on Cipla’s future US launches, pipeline execution and improving earnings visibility over the next two financial years.
Disclaimer: This article is for informational purposes only and should not be construed as investment advice. Views mentioned are those of the respective brokerages.