Cipla's Q2 FY26: Record Revenue and Strategic Expansion Amidst Evolving Market Dynamics

Cipla Limited has reported a stellar performance for the second quarter of Fiscal Year 2026 (Q2 FY26), achieving its highest-ever quarterly revenue of INR 7,589 crore. This robust financial outcome, coupled with a healthy EBITDA margin of 25%, underscores the company's resilient operating model and diversified portfolio. The growth was broad-based, with significant contributions from key markets including One India, U.S. Generics, One Africa, and Emerging Markets & Europe, reflecting a balanced and strategic approach to market penetration.

The One India business demonstrated an improving growth trajectory, registering a 7% year-on-year increase. The branded prescriptions segment, in particular, saw strong double-digit growth across key therapeutic areas such as urology, anti-diabetes, cardiac, and dermatology. The chronic mix further strengthened to 61.8% year-on-year, with Foracort emerging as the number one brand in the Indian Pharmaceutical Market (IPM). The company also successfully added four new brands to its prestigious INR 100 crore-plus club, expanding its presence within the IPM's top 300 brands. The trade generics business also delivered strong double-digit growth, supported by rigorous execution and six new product launches.

Cipla's strategic initiatives during the quarter highlight its commitment to innovation and market leadership. A major highlight was the entry into the obesity care segment with the launch of Yurpeak (Tirzepatide) in India, a significant partnership with Eli Lilly. This move addresses a critical health challenge and expands Cipla's therapeutic footprint. Furthermore, the company reinforced its fight against Anti-Microbial Resistance (AMR) with the introduction of Huena (Methenamine Hippurate), Zemdri (Plazomicin), and Cipenmet (Cefepime-Enmetazobactam), showcasing its science-led approach to public health.

In North America, Cipla delivered a quarterly revenue of $233 million, with Albuterol ranking as the number one player in the U.S. Albuterol MDI market. The company also launched Filgrastim, its first biosimilar in the U.S., marking a strategic entry into high-potential segments. The pipeline remains robust, with four major respiratory assets, including gAdvair, and three peptide assets, including Liraglutide, expected to launch by calendar year 2026. The USFDA's Voluntary Action Indicated (VAI) classification for its Bommasandra manufacturing facility further derisks these upcoming launches.

Global Footprint and ESG Commitment

The One Africa business recorded a 5% year-on-year growth in U.S. dollar terms, with South Africa growing at 6% in ZAR terms. The private market in South Africa demonstrated robust secondary growth, outperforming the market. The Emerging Markets & Europe (EMEU) business achieved its strongest quarterly revenue to date at USD 110 million, registering a solid 15% year-on-year growth. This performance was fueled by impressive execution across both DTM and B2B segments.

Cipla's commitment to Environmental, Social, and Governance (ESG) principles was also evident, with significant progress towards its 2025 goals for India Manufacturing Operations. The company achieved a 76% reduction in Scope 1 and 2 emissions, became 1.75 times water positive, and ensured all manufacturing operations are Zero Waste to Landfill (ZWTL) certified. Its MSCI ESG Rating was upgraded to 'A' from 'BBB', reflecting strong sustainability performance.

Outlook and Management Commentary

Looking ahead, management has revised its full-year EBITDA margin guidance to 22.75%-24%, adjusting from the earlier 23.5%-24.5%, primarily due to higher R&D investments in new programs and the anticipated lower contribution from generic Revlimid in the second half of the fiscal year. Despite these adjustments, the company remains confident in its ability to regain market-beating growth in India and capitalize on new product introductions globally. Cipla's strategic clarity, disciplined execution, and focus on sustainable growth position it well to navigate evolving market dynamics and deliver long-term value to its stakeholders.