Cipla’s earnings beat estimates, but leadership change raises eyebrows
Cipla reported better-than-expected quarterly results, driven by stronger revenue growth, says Narendra Solanki, Head of Fundamental Research at Anand Rathi Shares.
“Numbers were better than expected — both on revenue and profit. The surprise, however, came from the sudden change in leadership,” he told ET Now.
While the outgoing CEO was due for retirement next year, the timing of the announcement caught the market off guard. “We’ll have to wait and watch how the new management executes and what strategic changes they bring in,” Solanki added.
Despite the transition, the fundamental story remains intact, supported by steady margins and healthy US generics performance.
L&T and BHEL: Strong order books, infrastructure tailwinds
Solanki remains bullish on infrastructure and capital goods, particularly Larsen & Toubro (L&T) and BHEL, which have both posted solid earnings this quarter.“Government-led infrastructure spending continues to accelerate. Order awarding activity has picked up meaningfully compared to the first half of the year,” he said.
He expects further momentum in the second half of FY26 as capital expenditure programs ramp up. “Macro fundamentals are improving, and we’re optimistic that the infrastructure theme will remain a strong structural play,” Solanki noted.
L&T’s record order book and execution strength, along with BHEL’s revival driven by energy transition projects, position them well for medium- to long-term growth, he added.
Dr Reddy’s faces setback on GLP-1 opportunity
Shares of Dr Reddy’s Laboratories fell nearly 4% after its much-anticipated GLP-1 drug launch faced regulatory hurdles in Canada. Solanki termed it a “major setback” for the pharma major.
“The GLP-1 opportunity was expected to be a game-changer. The market had priced in at least a $100 million contribution by FY27,” he explained.
With patent expiry approaching in early 2026, any delay could allow competitors to gain first-mover advantage. “If you’re not first to market post-patent expiry, you lose pricing power and market share rapidly,” Solanki cautioned.
He emphasized that investors should monitor how quickly the company resolves regulatory observations to recover lost ground.
Market outlook: Macro stable, stock selection key
Solanki remains constructive on India’s macro outlook, citing rising public capex, a stable rupee, and moderating inflation. “Markets are seeing sectoral churn, but the underlying fundamentals remain healthy. Investors should focus on stock-specific stories with earnings visibility,” he said.