CIPLA - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 4.4

📊 Core Financials

Earnings Strength: EPS of ₹66.9 and PAT of ₹1,303 Cr (up 23.4%) reflect consistent profitability and healthy growth.

Return Metrics: ROCE at 20.1% and ROE at 16.0% are strong, indicating efficient capital deployment and shareholder value creation.

Debt Profile: Debt-to-equity of 0.00 — completely debt-free, which enhances financial resilience and cash flow flexibility.

Cash Flow: While not explicitly stated, the combination of zero debt and strong earnings implies robust operating cash flows.

💰 Valuation Indicators

Metric Value Insight

P/E Ratio 24.7 Reasonable vs. industry PE (33.4)

P/B Ratio ~3.97 Fair premium over book value

PEG Ratio 1.35 Slightly above fair value, but acceptable

Dividend Yield 0.82% Modest, adds to shareholder value

Valuation is fair, especially considering Cipla’s consistent earnings and debt-free balance sheet.

🧪 Business Model & Competitive Advantage

Cipla is a leading pharmaceutical company with a global footprint across generics, APIs, and respiratory therapies. Its strengths include

Strong presence in India, South Africa, and the US

Leadership in respiratory and chronic therapies

Robust R&D pipeline and regulatory compliance

Recent USFDA VAI classification for its Bengaluru facility

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Cipla has delivered a 106.6% return over five years and maintains a low beta of 0.55, indicating stability

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📈 Technical & Sentiment Indicators

RSI: 56.4 – Neutral zone, no strong momentum.

MACD: 6.05 – Mild bullish crossover.

Volume Surge – Above weekly average, indicating rising interest.

DMA 50 & 200: Current price is above both, signaling strength.

💡 Investment Strategy

🔽 Entry Zone

Ideal Buy Range: ₹1,500–₹1,540, near DMA 50 and below current price.

Current Price ₹1,578: Slightly above ideal entry, but still reasonable.

🕰️ Long-Term Holding

Strong Hold or Accumulate on Dips: Debt-free, high ROE/ROCE, and global leadership make Cipla a solid long-term compounder.

Monitor Regulatory Updates & FII Trends: Recent FII outflow (-1.04%) may reflect short-term caution, but DII inflow (+1.09%) suggests domestic confidence.

You can explore Cipla’s live performance metrics or its historical price and dividend data for deeper insights. Let me know if you'd like a peer comparison with Sun Pharma or Dr. Reddy’s.

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stockanalysis.com

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The Economic Times

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economictimes.indiatimes.com

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