Cipla Share Price Surge Following Kotak's 'Buy' Rating Upgrade

Kotak Institutional Equities upgraded Cipla's stock rating to 'buy' from 'add', citing reasonable valuations, upcoming US product launches (including Abraxane, projecting FY26/27 US sales at $30 million and $41 million respectively), anticipated domestic market recovery, and strong South Korean growth, leading to a 2% increase in Cipla's share price.

The upgrade comes despite concerns surrounding a potential pre-approval inspection (PAI) for Abraxane, which could delay its launch, and a slightly subdued Q3 outlook attributed to temporary factors; however, Kotak believes these concerns are already factored into the current share price and expects a gradual recovery in domestic growth, projecting a ~9 percent India sales CAGR over FY24-27.

Kotak's price target of Rs 1,725 for Cipla stock represents a potential 19% upside from Monday's closing price;  the recent clearance of Cipla's Goa facility, where Abraxane will be manufactured, further bolsters their positive outlook,  counterbalancing the impact of the impending patent expiry of another key cancer drug, Revlimid, through the strength of other upcoming US launches and the company's growing market share in the domestic respiratory segment.