Cipla Ltd.
ISIN: INE059A01026 • Market Cap: ₹1.14 Lakh Cr
The 5-Pillar Quality Audit for Cipla Ltd.
Evaluated across Profitability, Financial Health, Historical Compounding, Valuation Safety, and Ownership Governance:
1. Profitability & Capital Efficiency
Weight: 25%Measures operating margins (18.9%), Return on Capital Employed (16.1%), and equity compounding (11.3%).
2. Financial Health & Solvency
Weight: 25%Debt-to-Equity is 0.01 with comfortable interest coverage and clean working capital.
3. Growth & Compounding Track Record
Weight: 20%Historical 3Y Sales CAGR (3.2%) and 3Y PAT CAGR (-6.5%).
4. Valuation Multiple & Margin of Safety
Weight: 15%Trades at P/E of 33.94 vs PEG of 2.85 and Dividend Yield of 0.9%.
5. Ownership Quality & Governance
Weight: 15%Promoter holding stands at 29.2%, backed by 54.8% institutional ownership.
Key Fundamental Strengths
Fortress Balance Sheet (D/E: 0.01)
The company operates virtually debt-free, shielding net margins from interest rate cycles and monetary tightening.
Deep Institutional Sponsorship (54.8%)
Mutual funds, domestic DIIs, and foreign FIIs hold 54.8%, providing strong governance scrutiny.
Areas to Watch & Potential Risks
Topline Stagnation (3Y Sales CAGR: 3.2%)
Revenue growth has slowed below inflation rates, indicating cyclical demand slowdown or saturated core markets.
Sectoral & Macro Headwinds (Healthcare)
Subject to broader cyclical demand, raw material price shifts, and regulatory frameworks governing the Healthcare space.
Quantitative Strategy Eligibility
Checking CIPLA against established Indian wealth creation frameworks:
Coffee Can Investing Framework
Fails 10%+ revenue growth or 15%+ minimum capital return benchmark over historical periods.
Quality Factor Screener (High RoIC + Low Debt)
Scorecard of 63/100 or leverage profile sits below strict quality index hurdles.
GARP / Value-Growth Blend
Valuation multiple or return metrics require further cyclical pullback.
Healthcare Sector Peer Comparison
Compare CIPLA directly against top industry peers by market capitalization:
| Company | 5-Pillar Score | Market Cap | P/E | ROCE | D/E | Scorecard |
|---|---|---|---|---|---|---|
| Cipla Ltd. (CIPLA)Current | 63/100 | ₹1.14 Lakh Cr | 33.94 | 16.1% | 0.01 | — |
| Sun Pharmaceutical Industries Ltd. (SUNPHARMA) | 77/100 | ₹4.55 Lakh Cr | 37.65 | 20.4% | 0.05 | View |
| Divi's Laboratories Ltd. (DIVISLAB) | 73/100 | ₹2.26 Lakh Cr | 77.37 | 19.4% | 0.00 | View |
| Torrent Pharmaceuticals Ltd. (TORNTPHARM) | 64/100 | ₹1.91 Lakh Cr | 87.43 | 9.5% | 1.76 | View |
| Apollo Hospitals Enterprise Ltd. (APOLLOHOSP) | 70/100 | ₹1.27 Lakh Cr | 60.55 | 19.1% | 0.62 | View |
| Zydus Lifesciences Ltd. (ZYDUSLIFE) | 79/100 | ₹1.10 Lakh Cr | 24.42 | 21.9% | 0.43 | View |
Frequently Asked Questions: Cipla Ltd.
Q:What is the 5-Pillar Fundamental Score for Cipla Ltd. (CIPLA)?
Cipla Ltd. has a RupeeTools Fundamental Score of 63/100, placing it in the 'Moderate / Average' category. Its pillar scores are: Profitability (68/100), Financial Health (85/100), Growth (28/100), Valuation (55/100), and Ownership Quality (72/100).
Q:Is CIPLA fundamentally strong for long-term investment?
CIPLA currently holds a moderate quality rating of 63/100. While it operates in the Healthcare sector, investors should monitor its profit margins before initiating long-term positions.
Q:Does CIPLA pass the Coffee Can Investing filter?
No. CIPLA does not currently meet the strict 15% ROCE and 10% sustained topline compounding threshold mandated by the Coffee Can investing framework.
Q:How does CIPLA compare against other Healthcare peers?
Within India's Healthcare sector, CIPLA trades at a P/E of 33.94 and generates an ROCE of 16.1%. Compare its 5-Pillar score of 63/100 against top sector peers like Sun Pharmaceutical Industries Ltd. (77/100), Divi's Laboratories Ltd. (73/100).
Regulatory & SEBI Research Analyst Compliance Disclaimer:
This 5-pillar fundamental score is an automated quantitative health check generated purely from historical public financial statements, corporate filings, and exchange disclosures for educational and informational purposes only. It does NOT constitute investment advice, a stock recommendation, or a solicitation to buy or sell securities. RupeeTools is not a SEBI-registered Research Analyst. Please consult a SEBI-registered financial advisor before making investment decisions.