Cipla shares jump 4% as Citi puts stock on 90-day catalyst watch. What's driving the optimism?

Shares of pharmaceutical major Cipla rallied as much as 4% to their day’s high of Rs 1,409 on the BSE on Monday after international brokerage firm Citi placed the stock on a 90-day Positive Catalyst Watch while maintaining its ‘Buy’ rating and target price of Rs 1,700, an upside of 25.55% from current levels.

The Wall Street brokerage believes several near-term triggers could support the stock, including the likely approval of gFlovent from the Goa facility, which could boost growth in the US market, and the expected launch of gVentolin.

Citi also noted that Cipla's Nintedanib has captured nearly 50% market share in the US, while the company's US business is poised for a revenue rebound following recent weakness.Also Read | Cipla appoints health chief Shivam Puri to lead One India businessOn the domestic front, the brokerage said Cipla's India business continues to perform well, aided by a recovery in its respiratory portfolio.

Citi also highlighted that a re-inspection of the Indore plant is due at any time, and a favourable outcome along with USFDA clearance could serve as an additional catalyst for the stock.

The brokerage added that easing geopolitical tensions have reduced concerns around raw material costs and margins.According to Citi, Cipla's earnings have likely bottomed out following the decline related to gRevlimid.

The stock currently trades at 25x FY27E earnings and 21x FY28E earnings.

With the India business contributing nearly two-thirds of EBITDA, Citi believes Cipla offers attractive exposure to the domestic pharmaceutical market at a more reasonable valuation than several India-focused peers.

It noted that Cipla's India business is valued at 7.8 times FY26 sales compared with 8.5 times for Mankind.

Overall, the brokerage sees a favourable risk-reward profile, supported by upcoming US catalysts, improving domestic business trends and attractive valuations.Also Read | Dividend alert!

Last date to buy Asian Paints, HUL, Tata Power among 11 stocks for Rs 73 dividendsCipla Q4 snapshot The pharma major reported a 55% year-on-year (YoY) decline in its consolidated net profit at Rs 555 crore in the fourth quarter.

The profit was compared with Rs 1,222 crore recorded in the last year's fourth quarter.

The company's revenue from operations slipped around 3% YoY to Rs 6,541 crore in the March quarter.EBITDA fell 35% to Rs 997 crore from Rs 1,538 crore in the year-ago period, while EBITDA margin contracted sharply to 15.2% from 22.8%.

For the entire financial year which ended on March 31, 2026, Cipla reported a 2% YoY rise in revenue to Rs 28,163 crore but 26% YoY decline in net profit to Rs 3,879 crore.Cipla shares are down over 6% in 2026.

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