Cipla Limited

Healthcare — Drug Manufacturers - Specialty & Generic · NSE

₹1,325.10−₹2.90 (−0.22%)

DalalBaazaar Score

63 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

Driven by high debt relative to equity, falling profits.

In simple words: Reasonable but unspectacular business quality, though profits are falling even as sales grow. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:59 pm

Understanding the Business

Company site ↗

The 60-second version of Cipla Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Cipla Limited, together with its subsidiaries, manufactures, develops, sells, and distributes pharmaceutical products in India, the United States, South Africa, and internationally.

IndustryDrug Manufacturers - Specialty & Generic

SectorHealthcare

Employees31,369

Annual revenue₹27,712 Cr

How does it make money?

Turns over ₹27,712 Cr a year. Of every ₹100 of sales, about ₹14 reaches shareholders as profit, with ₹23 left at the operating level before interest, tax and depreciation. Each of its 31,369 employees supports ₹88.3 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹88.3 lakh

Who are its competitors?

The closest listed comparisons in its industry are SUN PHARMACEUTICAL IND L, DR. REDDY S LABORATORIES, DIVI S LABORATORIES LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 14.9% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE14.5%

What is the outlook?

35 analysts covering the stock expect revenue to grow about 12.1% and earnings to grow about 25.1% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+12.1%

Est. earnings growth+25.1%

Analysts35

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +23% while net margin moved +12% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+23%

Margin effect+12%

DalalBaazaar Score

63/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 7.2% — barely ahead of inflation
• Profit CAGR of 11.5%
✗ Profit fell 39.2% in the latest year

Quality vs. Valuation

Company Quality

64/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

49/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

31.8x

3Y Median

29.5x

40 monthly readings · mean 30.1x · range 18.8x–44.5x

Sector Median

34.9x

median of 3 sector peers

🟡Currently trading close to its 3y median of 29.5x — the market is paying about what it usually pays for this company.

🟡Against its sector it is priced broadly in line with the peer median of 34.9x.

vs. its own history

Fair

29.5x median over 40 months · +8%

vs. sector peers

Fair

34.9x median of 3 peers · -9%

vs. generic bands

Fair

15x–35x

EV/EBITDA

17.0x

PEG

2.77

What's Good / What's Bad

🟢 What's Going Well2

Debt is being paid down
Total debt is down 24% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Return on capital is falling
ROCE has declined from 17.0% to 14.9% — often a sign of competition or overexpansion.

Red Flags

1 item require attention · 1 high

🔴High leverageFinancial
Debt/Equity of 1.78x — earnings must service borrowings before shareholders see anything.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 24% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Leverage amplifies any setback
Debt/Equity of 1.78x. Interest is payable whether or not the business has a good year.
Growth barely outpaces inflation
Revenue compounding at 7.2% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 21%✓ 22.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Revenue growth stays above 5% a year✓ 7.2% CAGR
Latest reported year was 3.5%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
3Free cash flow remains positive✓ ₹861 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 12%✓ 14.9%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

7 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✗ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

3 good · 6 neutral · 2 weak

Market Cap

₹1.07 L Cr

Large Cap

Large, widely-covered business — typically the steadiest of the bands

P/E (Trailing)

31.8x

Fair

Fairly valued against the generic band

P/B Ratio

3.11x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹41.7

Profitable

Profitable on a per-share basis

ROE

11.3%

Moderate

Moderate capital efficiency

ROCE

14.9%

Moderate

Moderate return on the capital in the business

Debt/Equity

1.78x

High

High leverage

Revenue Growth (YoY)

3.5%

Modest

Modest growth

Profit Growth (YoY)

-39.2%

Falling

Profits are shrinking

Dividend Yield

0.98%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹861 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

20.9x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

12.5%

Average

Average margins

Net Margin

12.0%

Good

Strong bottom-line conversion

Current Ratio

3.44

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.09

Defensive

Steadier than the market

52W Range Position

31%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

1350.9 / 1390.3

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

27.8

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹22,473 Cr	₹25,447 Cr	₹27,145 Cr	₹27,712 Cr	+7.2%
EBITDA	₹5,115 Cr	₹6,803 Cr	₹7,432 Cr	₹6,255 Cr	+6.9%
EBITDA Margin	22.8%	26.7%	27.4%	22.6%	—
PAT (Net Profit)	₹2,802 Cr	₹4,122 Cr	₹5,273 Cr	₹3,879 Cr	+11.5%
EPS	₹34.69	₹51.01	₹65.24	₹48	+11.4%
ROE	12.0%	15.4%	16.9%	11.3%	—
ROCE	17.0%	21.0%	21.5%	14.9%	—
Total Debt	₹803 Cr	₹559 Cr	₹438 Cr	₹614 Cr	-8.6%
Free Cash Flow	₹2,055 Cr	₹2,785 Cr	₹3,457 Cr	₹861 Cr	-25.2%

🟢 Revenue has grown at 7.2% a year over 3 years.

🟢 EBITDA has grown at 6.9% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 22.6% over 3 years.

🟢 PAT (Net Profit) has grown at 11.5% a year over 3 years.

🟢 EPS has grown at 11.4% a year over 3 years.

🟡 ROE has held roughly flat at 11.3% over 3 years.

🔴 ROCE has fallen from 17.0% to 14.9% over 3 years (-2.1 pts).

🟢 Total Debt has shrunk at 8.6% a year over 3 years.

🔴 Free Cash Flow has shrunk at 25.2% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹42,496 Cr

Total Liabilities

₹7,976 Cr

Cash & Equivalents

₹1,018 Cr

Operating Cash Flow

₹3,940 Cr

Capex

-₹3,079 Cr

Shareholding (proxy)

Institutional Holding

45.0%

Insider Holding

31.1%

Corporate Actions

Next Earnings

27 Oct 2026

Dividend Rate

₹13

Ex-Dividend Date

05 Jun 2026

Analyst Consensus

Recommendations

22 Buy · 10 Hold · 4 Sell

Target Price (Mean)

₹1,512.19

+14.1% vs CMP

Target Range

₹1,170 – ₹1,768

Peer Comparison

Company	P/E	ROE
SUN PHARMACEUTICAL IND L	34.9x	14.5%
DR. REDDY S LABORATORIES	31.0x	8.8%
DIVI S LABORATORIES LTD	83.0x	17.5%

Recent News

2 mixed1 negative3 general

Cipla Shares Slip Despite USFDA Nod for Generic Ventolin Inhaler; Should You Buy or Sell This Pharma Stock?

Goodreturns, 16 Oct

Cipla Share Price Rises 2.28%: Valuation and Sector View

Univest, 24 SeptPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

TCS, HDFC Life, Cipla - Which stock to buy and sell? Jigar Patel of Anand Rathi suggests strategy - Target, stop loss

Livemint, 12 Oct

Cipla Share Price Falls Over 3% After Q1 FY27 Results Disappoint Investors; Profit Drops 39%

India Infoline, 23 JulResults

🔴Potentially negativeReported deterioration, which feeds the growth and margin inputs on this page directly.

Cipla stock has October 27 results ahead with 11.00 percent margin

ad-hoc-news.de, 16 OctResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Cipla’s India Business Just Hit a Record — So Why Did Profit Crash 39%?

NiftyTrader, 23 Jul

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Profitability · Risk

MiddlingGrowth · Valuation

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 1 high-severity red flag sits above this conclusion and should be read first.

All 5 tripwires holding · see Key things to watch ↑