MUMBAI–Indian pharmaceutical company Cipla reported a 35% decline in consolidated net profit for the second quarter of fiscal year 2027, as weaker sales in North America and shrinking operating margins offset strong growth in its domestic business.
The Mumbai-based drugmaker posted a consolidated net profit of Rs 878 crore for the quarter ended September 30, 2026, compared with Rs 1,351.17 crore during the corresponding period last year, according to a stock exchange filing Tuesday.
Revenue from operations declined 2.4% year-over-year to Rs 7,403.93 crore from Rs 7,589 crore, reflecting weaker performance in several international markets.
Cipla’s operating earnings also deteriorated during the quarter. Earnings before interest, taxes, depreciation and amortization (EBITDA) fell 26.8% to Rs 1,388 crore from Rs 1,895 crore in the year-earlier period.
The company’s EBITDA margin contracted by 630 basis points to 18.7%, compared with 25% a year earlier, indicating significant pressure on operating profitability.
Despite the decline in overall earnings, Cipla’s domestic pharmaceutical business delivered strong growth.
Revenue from India increased 12% to Rs 3,516 crore from Rs 3,146 crore in the corresponding quarter of fiscal year 2026.
The company said its One-India business achieved its highest-ever quarterly sales, making the domestic market a major contributor to revenue during the period.
However, the gains in India were insufficient to offset a sharp slowdown in North America, one of Cipla’s important international markets.
Revenue from North American operations dropped 19% year-over-year to Rs 1,643 crore, compared with Rs 2,039 crore in the same quarter last year.
The North American business generated quarterly revenue of $172 million, reflecting the weaker sales performance in the region.
The decline significantly affected Cipla’s consolidated results, contributing to lower revenue and reduced operating margins.
Performance across the company’s other international markets was mixed.
Cipla’s One Africa business reported revenue of Rs 1,171 crore, representing a 1% decline from the previous year.
Within that segment, revenue from South Africa fell 3% to Rs 872 crore.
However, the company said its private-market business in South Africa continued to outperform the broader pharmaceutical market, growing at 1.3 times the industry’s rate.
Revenue from emerging markets and Europe remained largely unchanged at Rs 967 crore, despite geopolitical uncertainties affecting international business conditions.
Meanwhile, Cipla’s active pharmaceutical ingredients (API) and other businesses segment recorded a substantial decline.
Revenue from the segment plunged 59% to Rs 107 crore from Rs 259 crore in the corresponding quarter last year.
The weakness across multiple overseas operations highlighted the challenges facing the company’s international business, even as demand in India remained strong.
Investors reacted cautiously to the quarterly results.
Shares of Cipla were trading approximately 0.6% lower at Rs 1,347 apiece during afternoon trading Tuesday following the earnings announcement.
The company’s latest financial results underscore the contrast between its growing domestic pharmaceutical operations and weaker international performance.
While record quarterly sales in India provided support, declining North American revenue and a significant contraction in operating margins weighed heavily on Cipla’s overall profitability during the September quarter. (Source: IANS)
