Cipla posts third straight quarterly profit decline, names veteran Dinesh Jain as CFO

India's Cipla (CIPL) posted a bigger-than-expected fall in first-quarter profit, logging its third consecutive quarterly decline as muted sales of a generic cancer drug and US supply disruptions tied to tumor treatment lanreotide weighed on results.

Consolidated net profit fell 39.2% to 7.89 billion rupees ($81.73 million) in the quarter ended June 30, missing analysts' average estimate of 8.17 billion rupees, according to LSEG data. Revenue from operations rose 2.3% to 71.19 billion rupees, narrowly beating estimates of 70.73 billion rupees.

The company also named Dinesh Jain, a three-decade company veteran currently heading corporate finance, as its new global chief financial officer, effective Friday. He will succeed Ashish Adukia, who will move to another internal business leadership role.

Cipla has increasingly leaned on its India business to offset weakness in the United States, where sales of the generic version of Bristol Myers Squibb's (BMY) Revlimid have fallen following the loss of exclusivity. Its US business was further strained after a Food and Drug Administration inspection at the facility of its sole lanreotide supplier triggered a temporary production halt. India and North America together account for roughly two-thirds of company revenue.

North America revenue fell 21% to 15.32 billion rupees, while India revenue grew 12% to a record 34.52 billion rupees, with double-digit sales growth recorded in respiratory, anti-diabetes and cardiac chronic therapies. Cipla is also expanding in obesity treatments, including Yurpeak, sold under a licensing agreement with Eli Lilly (LLY).

Adding to concerns over the company's largest market, President Donald Trump this week outlined a phased tariff plan for imported generic medicines, giving drugmakers a two-year window before duties take effect. Chief executive Achin Gupta said the company would monitor the evolving situation and assess how to expand domestic American manufacturing. "We have experience in doing that. So whichever way it moves, we will be able to adapt," he told analysts on a post-earnings call, noting that 35% to 40% of the company's manufacturing already takes place within the US.

Analysts at Nirmal Bang said Cipla's respiratory franchise would serve as its biggest US growth driver in the near term, with a second product expected to receive approval shortly. Limited competition in that segment also gives the company room to protect margins on its generic Ventolin inhaler and the pending generic Flovent, analysts added.