Cipla shares closed lower on 27 October, after a day high of Rs 1,372.70, as the firm posted a 35% drop in Q2 profit.

Cipla Limited said its net profit for the July-September quarter was Rs 878 crore, against Rs 1,351 crore a year earlier. Revenue slipped 2.4% to Rs 7,404 crore.

Operating profit, known as EBITDA, dropped 27% to Rs 1,388 crore. The margin on that profit shrank to 18.7%, from about 25% a year ago. There were some bright spots.

In India, Cipla posted its highest quarterly sales ever, up 12% to Rs 3,516 crore. That business now makes up 48% of total revenue.

Compared with the previous quarter, revenue rose 4% and the margin improved by about two percentage points.

North America told a different story. Revenue there fell 19% from a year earlier to $172 million.

Cipla’s Managing Director and Global CEO Achin Gupta said the US business has kept growing from one quarter to the next and he expects upcoming launches to keep supporting it.

Cipla also spent Rs 423 crore on research, or 5.7% of sales, held net cash of Rs 9,823 crore and kept its full-year operating margin target of 18.5% to 20%.

During the quarter, Cipla won approval from the US drug regulator for a generic version of Advair Diskus, a breathing medicine, in all three strengths.

In September, it also secured exclusive US rights to QL2107, a close copy of the cancer drug Keytruda, from Qilu Pharmaceutical.

On 27 October, Cipla’s board also appointed Rashmi Joshi as an additional independent director.

At close, Cipla shares settled at Rs 1,350 on NSE, down Rs 5 or 0.37% from the previous close of Rs 1,355.

It’s down about 10% this year and 14.8% over 12 months, with a market value near Rs 1.09 lakh crore.

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