Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

<ul>
<li>In Q2FY24, <a href="https://www.smartkarma.com/entities/cipla-ltd" target="_blank" data-smartkarma-citation="entities:3918:1" rel="noopener">Cipla Ltd (CIPLA IN)</a> clocked record-high quarterly revenue at INR66.8B (+15% YoY), and EBITDA margin of 26%, driven by double-digit growth across India, North America, and South Africa.</li>
<li>U.S. business reported highest ever revenue of $229M. India revenue is up 10% YoY, driven by continued market beating performance in branded prescription and trade generics businesses.</li>
<li>Cipla raised FY24 EBITDA margin guidance from 23% to 23% to 24% with bias towards the higher end. The company started FY24 with an EBITDA margin guidance of 21–22%.</li>
</ul>


In Q2FY24, Cipla Ltd (CIPLA IN) clocked record-high quarterly revenue at INR66.8B (+15% YoY), and EBITDA margin of 26%, driven by double-digit growth across India, North America, and South Africa.
U.S. business reported highest ever revenue of $229M. India revenue is up 10% YoY, driven by continued market beating performance in branded prescription and trade generics businesses.
Cipla raised FY24 EBITDA margin guidance from 23% to 23% to 24% with bias towards the higher end. The company started FY24 with an EBITDA margin guidance of 21–22%.


2023 High Conviction Update: Cipla (CIPLA IN)- Q2 Result Beats Estimates; Margin Guidance Raised

Dr. Reddy's Laboratories / Equity Bottom-Up

<ul>
<li>Global generics revenue increased 9% YoY to INR61 billion, mainly driven by double-digit growth in North America and Europe generic businesses, partly offset by muted growth in domestic market.</li>
<li>Revenue from North America generics increased 13% y/y to INR31.7 billion, driven by growing momentum in core portfolio, Mayne integration, and favorable Fx. Pricing environment remains stable.</li>
<li>Despite increase in SG&amp;A and R&amp;D expenses, EBITDA grew 13% YoY to INR 21.8 billion. Net profit increased 33% YoY to INR14.8 billion. Both EBITDA and net profit topped estimates.</li>
</ul>


Global generics revenue increased 9% YoY to INR61 billion, mainly driven by double-digit growth in North America and Europe generic businesses, partly offset by muted growth in domestic market.
Revenue from North America generics increased 13% y/y to INR31.7 billion, driven by growing momentum in core portfolio, Mayne integration, and favorable Fx. Pricing environment remains stable.
Despite increase in SG&amp;A and R&amp;D expenses, EBITDA grew 13% YoY to INR 21.8 billion. Net profit increased 33% YoY to INR14.8 billion. Both EBITDA and net profit topped estimates.


Dr. Reddy's Laboratories (DRRD IN): Highest Ever Sales and Profit in Q2; Good Show in Key Markets

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<ul>
<li>In our prior EM Strategy (August 7, 2023) we discussed how MSCI EM (EEM-US) was near major 1+ year resistance at $42.</li>
<li>After being unable to break out, EEM-US consolidation has continued, and is again approaching major 10.5-month support at $37-$37.50, which has been our important line-in-the-sand throughout 2023.</li>
<li>As long as EEM-US is above $37, we are buyers on this pullback.</li>
</ul>


In our prior EM Strategy (August 7, 2023) we discussed how MSCI EM (EEM-US) was near major 1+ year resistance at $42.
After being unable to break out, EEM-US consolidation has continued, and is again approaching major 10.5-month support at $37-$37.50, which has been our important line-in-the-sand throughout 2023.
As long as EEM-US is above $37, we are buyers on this pullback.


MSCI EM Index Approaching 10.5-Month Support; Remain Overweight India; Many EM Buys

Zydus Lifesciences Ltd / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/zydus-lifesciences-ltd" target="_blank" data-smartkarma-citation="entities:12914:1" rel="noopener">Zydus Lifesciences Ltd (ZYDUSLIF IN)</a> recorded 30% YoY growth in revenue to INR51B in Q1FY24, driven by 57% YoY growth in US formulation business. India business revenue grew 6% YoY.</li>
<li>US business growth was driven by new product launches and improvement in base business. The company has launched four new products in the US during the quarter.</li>
<li>Zydus Lifesciences expects double-digit growth in India branded formulation business to continue and the U.S. business to grow on a formidable base of FY23 going forward.</li>
</ul>



Zydus Lifesciences Ltd (ZYDUSLIF IN) recorded 30% YoY growth in revenue to INR51B in Q1FY24, driven by 57% YoY growth in US formulation business. India business revenue grew 6% YoY.
US business growth was driven by new product launches and improvement in base business. The company has launched four new products in the US during the quarter.
Zydus Lifesciences expects double-digit growth in India branded formulation business to continue and the U.S. business to grow on a formidable base of FY23 going forward.


Zydus Lifesciences (ZYDUSLIF IN): Strong Start of FY24 Riding on US Formulation Business

iShares MSCI ACWI ETF / Technical Analysis

<ul>
<li>Global equities under pressure; we discussed in our August 3,2023 <em>Int'l Compass</em> how it could be the start of a ~15% pullback in $ACWI, which would put it at $84-$85.</li>
<li>We also discussed how it is possible that this is a normal 3%-6% pullback to the major $93 support level (which it tested today).</li>
<li>If the 10-year Treasury yield and DXY remain below their respective resistance levels, we remain buyers on this pullback to $93 on ACWI-US.</li>
</ul>


Global equities under pressure; we discussed in our August 3,2023 Int'l Compass how it could be the start of a ~15% pullback in $ACWI, which would put it at $84-$85.
We also discussed how it is possible that this is a normal 3%-6% pullback to the major $93 support level (which it tested today).
If the 10-year Treasury yield and DXY remain below their respective resistance levels, we remain buyers on this pullback to $93 on ACWI-US.


10-Yr Treasury Yield and DXY at Key Inflection Points; $ACWI Testing $93; Energy/HC/Tech/CD Buys

India

Sun Pharmaceutical Industries Limited manufactures and markets pharmaceuticals for domestic and international distribution. The Company's pharmaceutical portfolio includes drugs in the areas of diabetes, cardiology, neurology, psychiatry and  gastroenterology.

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Sun Pharmaceutical Industries (SUNP IN)

2023 High Conviction Update: Cipla (CIPLA IN)- Q2 Result Beats Estimates; Margin Guidance Raised

In Q2, Cipla clocked record high quarterly revenue at INR66.8B, up 15% YoY, and EBITDA margin of 26%. The company raised FY24 EBITDA margin...

Tina Banerjee

Dr. Reddy's Laboratories (DRRD IN): Highest Ever Sales and Profit in Q2; Good Show in Key Markets

Revenue increased 9% YoY to INR69B, beating street’s expectation of INRINR68, driven by double-digit growth North America and Europe. Net profit...

Tina Banerjee

MSCI EM Index Approaching 10.5-Month Support; Remain Overweight India; Many EM Buys

$EEM is again approaching major 10.5-month support at $37-$37.50, which has been our important line-in-the-sand throughout 2023. As long as $EEM is...

Vermilion Research

Zydus Lifesciences (ZYDUSLIF IN): Strong Start of FY24 Riding on US Formulation Business

Quarterly revenue surpassed INR50B mark for 2nd consecutive quarter. Even upon a high base, US revenue increased 8% sequentially driven by new...

Tina Banerjee

10-Yr Treasury Yield and DXY at Key Inflection Points; $ACWI Testing $93; Energy/HC/Tech/CD Buys

Test of Key Supports: $93 on $ACWI, $47.50 on $ACWX, $70 on $EFA, 4200 on EURO $STOXX 50. As long as 10-Yr Treasury Yield $TNX and $DXY remain...

Vermilion Research

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