CIPLA - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 4.4

🧪 Fundamental Analysis: CIPLA Ltd.

CIPLA is a leading pharmaceutical company with strong fundamentals, attractive valuations, and low debt, making it a compelling candidate for long-term investment.

Metric Value Implication

Market Cap ₹1,27,225 Cr Large-cap; stable and globally diversified

Stock P/E 23.6 Undervalued vs. industry PE of 34.0

PEG Ratio 0.92 Fairly valued with decent growth prospects

ROE / ROCE 17.8% / 22.7% Excellent profitability and capital efficiency

Dividend Yield 0.83% Moderate; adds income stability

Debt-to-Equity 0.01 Extremely low; strong balance sheet

EPS ₹66.8 Solid earnings base

Qtr Profit Var +9.88% Steady growth; not explosive but consistent

FII/DII Holding Change -1.04% / +1.09% DII confidence rising; FII trimming possibly due to profit booking

📉 Technical Analysis

Current Price: ₹1,574

DMA 50 / DMA 200: ₹1,499 / ₹1,488 → Trading above both; bullish trend

RSI: 71.1 → Overbought zone; caution for short-term entry

MACD: +10.3 → Strong bullish momentum

Volume: Below average; momentum may be cooling

💰 Ideal Entry Price Zone

Given the strong fundamentals but overheated technicals

Ideal Entry Zone: ₹1,480–₹1,520

Wait for RSI to cool below 60 before entering

Avoid chasing above ₹1,600 unless supported by breakout volume and earnings upgrades

🌱 Long-Term Investment Outlook

Why it’s a strong candidate

Excellent ROCE and ROE — efficient use of capital

PEG < 1 — growth at reasonable valuation

Near-zero debt — financial resilience

Global footprint in generics and specialty drugs

DII accumulation signals domestic institutional confidence

Risks to monitor

RSI suggests short-term overheating

FII trimming could signal valuation concerns or sector rotation

Pharma sector is defensive — may underperform in high-growth bull markets

🏁 Exit Strategy / Holding Period

If you already hold CIPLA

Holding Period: 3–5 years for compounding returns and sector stability

Exit Strategy

Consider partial profit booking near ₹1,700–₹1,720 (recent high) if RSI remains elevated

Hold as long as ROCE stays above 20% and PEG remains below 1

Reassess if regulatory risks or margin pressures emerge

Would you like a comparison with other pharma majors like Sun Pharma or Dr. Reddy’s to see how CIPLA stacks up?

Edit in a page