CIPLA - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.0
| Stock Code | CIPLA | Market Cap | 1,07,350 Cr. | Current Price | 1,329 ₹ | High / Low | 1,673 ₹ |
| Stock P/E | 23.4 | Book Value | 412 ₹ | Dividend Yield | 0.98 % | ROCE | 20.1 % |
| ROE | 16.0 % | Face Value | 2.00 ₹ | DMA 50 | 1,448 ₹ | DMA 200 | 1,495 ₹ |
| Chg in FII Hold | -0.61 % | Chg in DII Hold | 0.47 % | PAT Qtr | 822 Cr. | PAT Prev Qtr | 1,211 Cr. |
| RSI | 25.5 | MACD | -47.3 | Volume | 11,98,384 | Avg Vol 1Wk | 23,08,217 |
| Low price | 1,282 ₹ | High price | 1,673 ₹ | PEG Ratio | 1.28 | Debt to equity | 0.00 |
| 52w Index | 12.1 % | Qtr Profit Var | -42.9 % | EPS | 57.2 ₹ | Industry PE | 29.0 |
📊 Financials: Cipla Ltd. has reported PAT of 822 Cr compared to 1,211 Cr previously, reflecting a -42.9% quarterly profit variation. ROE at 16.0% and ROCE at 20.1% indicate strong efficiency. Debt-to-equity ratio of 0.00 highlights a debt-free balance sheet, strengthening financial resilience. EPS of 57.2 ₹ supports earnings visibility, though recent profit decline raises caution.
💹 Valuation: Current P/E of 23.4 is below the industry average (29.0), suggesting relative undervaluation. P/B ratio ~3.23 (Price 1,329 ₹ / Book Value 412 ₹) is reasonable for the sector. PEG ratio of 1.28 indicates fair valuation relative to growth. Dividend yield of 0.98% provides modest income support. Intrinsic value appears aligned with current price, offering long-term stability.
🏢 Business Model: Cipla operates in the pharmaceutical sector, with a diversified portfolio across generics, respiratory, oncology, and specialty drugs. Competitive advantage lies in strong R&D capabilities, global presence, and brand recognition. The company benefits from recurring demand in healthcare and exports to regulated markets.
📈 Entry Zone: Attractive accumulation zone between 1,280–1,320 ₹, close to its 52-week low (1,282 ₹) and below DMA200 (1,495 ₹). RSI at 25.5 indicates oversold conditions, while MACD (-47.3) suggests bearish momentum. Long-term investors can accumulate gradually at lower levels.
🔒 Holding Guidance: Fundamentally strong with debt-free operations, robust ROE/ROCE, and diversified business model. Suitable for long-term holding, though investors should monitor profit momentum and regulatory developments.
Positive
- Debt-free balance sheet enhances financial resilience.
- Strong ROE (16.0%) and ROCE (20.1%) highlight efficiency.
- Diversified pharmaceutical portfolio across multiple therapeutic areas.
- DII holdings increased (+0.47%), reflecting domestic confidence.
Limitation
- Quarterly PAT decline (-42.9%) raises caution on earnings momentum.
- P/B ratio of 3.23 suggests moderate valuation premium.
- Dividend yield of 0.98% offers limited income support.
- FII holdings decreased (-0.61%), showing cautious foreign sentiment.
Company Negative News
- No major negative news reported, but profit decline and reduced FII holdings raise caution.
Company Positive News
- Debt-free operations strengthen balance sheet stability.
- Strong brand recognition and global presence.
- DII holdings increased, reflecting domestic institutional confidence.
Industry
- Pharmaceutical sector benefits from recurring healthcare demand.
- Industry P/E at 29.0 suggests optimism in the sector.
- Global demand for generics and specialty drugs supports long-term growth.
Conclusion
✅ Cipla Ltd. is financially strong, debt-free, and diversified across therapeutic areas. Despite recent profit decline, its efficiency metrics and global presence make it a promising long-term investment. Accumulation near 1,280–1,320 ₹ is recommended for patient investors, with monitoring of earnings momentum and regulatory developments.
I can also extend this with a peer comparison against Sun Pharma, Dr. Reddy’s, and Lupin to highlight Cipla’s relative valuation and efficiency. Would you like me to add that?