CIPLA - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.2
| Stock Code | CIPLA | Market Cap | 1,05,787 Cr. | Current Price | 1,310 ₹ | High / Low | 1,673 ₹ |
| Stock P/E | 23.1 | Book Value | 412 ₹ | Dividend Yield | 0.99 % | ROCE | 20.1 % |
| ROE | 16.0 % | Face Value | 2.00 ₹ | DMA 50 | 1,288 ₹ | DMA 200 | 1,401 ₹ |
| Chg in FII Hold | -1.38 % | Chg in DII Hold | 1.26 % | PAT Qtr | 822 Cr. | PAT Prev Qtr | 1,211 Cr. |
| RSI | 60.9 | MACD | 11.2 | Volume | 14,47,981 | Avg Vol 1Wk | 14,47,486 |
| Low price | 1,166 ₹ | High price | 1,673 ₹ | PEG Ratio | 1.26 | Debt to equity | 0.00 |
| 52w Index | 28.4 % | Qtr Profit Var | -42.9 % | EPS | 57.2 ₹ | Industry PE | 30.1 |
📊 Financials: CIPLA demonstrates strong fundamentals with ROE at 16.0% and ROCE at 20.1%, reflecting efficient capital utilization. EPS of ₹57.2 supports earnings visibility. Debt-to-equity is 0.00, highlighting a debt-free balance sheet. However, quarterly PAT declined from ₹1,211 Cr. to ₹822 Cr. (-42.9%), showing short-term earnings weakness.
💹 Valuation: The stock trades at a P/E of 23.1, below the industry average of 30.1, suggesting undervaluation relative to peers. Book value of ₹412 results in a P/B of ~3.18, reasonable for the sector. PEG ratio of 1.26 indicates fair valuation relative to growth. Intrinsic value appears supportive for accumulation at lower levels.
🏢 Business Model: CIPLA operates in the pharmaceutical sector, benefiting from strong demand for generics and specialty formulations. Its competitive advantage lies in debt-free operations, efficient profitability metrics, and diversified product portfolio. Institutional sentiment is mixed, with FII holdings down (-1.38%) but DII holdings up (+1.26%).
🎯 Entry Zone: Attractive entry between ₹1,250–1,300, near DMA support levels. Long-term investors may hold for 3–5 years, with exit considerations if ROE falls below 14% or earnings growth slows further.
Positive
- Strong ROCE (20.1%) and ROE (16.0%).
- Debt-free balance sheet ensures financial stability.
- EPS of ₹57.2 supports earnings visibility.
- DII holdings increased (+1.26%), showing domestic institutional support.
- P/E of 23.1 below industry average (30.1), suggesting undervaluation.
Limitation
- Quarterly PAT declined sharply (-42.9%).
- FII holdings decreased (-1.38%), showing reduced foreign investor confidence.
- Dividend yield modest at 0.99%.
- PEG ratio of 1.26 indicates fair valuation but not deeply undervalued.
Company Negative News
- Recent quarterly profit decline and reduced FII interest highlight cautious sentiment.
Company Positive News
- Debt-free status strengthens balance sheet.
- Strong ROE and ROCE highlight operational efficiency.
- DII holdings increased, reflecting domestic institutional confidence.
Industry
- Pharmaceutical sector trades at industry P/E of 30.1.
- CIPLA’s P/E of 23.1 suggests undervaluation relative to peers.
Conclusion
✅ CIPLA is a fundamentally strong pharmaceutical company with excellent profitability and zero debt. Entry near ₹1,250–1,300 offers safety, while holding for 3–5 years could yield solid returns if earnings growth sustains and institutional confidence stabilizes.