CIPLA vs DRREDDY
Side-by-side comparison of Cipla Ltd. and Dr. Reddy's Laboratories Ltd.. Descriptive only — not investment advice.
Cipla Ltd.
Pharma
Quality Score: 51/100
Dr. Reddy's Laboratories Ltd.
Pharma
Quality Score: 57/100
At a glance
| Metric | CIPLA | DRREDDY |
|---|---|---|
| Quality Score | 51/100 | 57/100 |
| P/E (trailing) | 23.9 | 19.1 |
| Forward P/E | 24.4 | 23.5 |
| ROE | — | +16.1% |
| Profit margin | +16.3% | +16.4% |
| Debt-to-equity | 1.42 | 18.03 |
| Dividend yield | +0.97% | +0.62% |
| 1Y price return | -9.9% | +12.2% |
| From 52w high | -19.5% | -6.0% |
| Analyst rating1 = Strong Buy, 5 = Strong Sell | 2.64 | 2.82 |
Highlighted value = better on the metric (lower for P/E, D/E, drawdown, analyst rating; higher elsewhere). Descriptive only.
Snapshots
Cipla (₹1,347) trades at a PE of 23.94 against a peer group where multiples range from 19 to 71.9, placing it second-lowest among six tracked pharma peers. The stock is 9.93% lower over 12 months, sits 6.7% below its 200-DMA, and carries a quality score of 30 — last among its peer group. Active USFDA regulatory actions on both a key supplier and the Goa manufacturing plant are the dominant near-term news drivers.
Dr. Reddy's Laboratories (DRREDDY) trades at ₹1,293.90, up 12.21% over 12 months and above both its 50-DMA (₹1,277.62) and 200-DMA (₹1,258.56). Trailing PE of 19.06 is the lowest among six tracked Pharma peers, while 5-year earnings CAGR of -14.3% and rising debt-to-equity of 18.03 reflect a company navigating a period of profitability pressure. Q4FY26 results are due May 12, 2026, making near-term data a key reference point.
Pros
- ✓Debt trend is falling and FCF was positive in 4 of available years, indicating improving capital discipline on the balance sheet side.
- ✓At a PE of 23.94, Cipla trades at a meaningful discount to sector peers SUNPHARMA (40.6x), DIVISLAB (71.9x), MAXHEALTH (69.5x), and APOLLOHOSP (64.6x) — only DR. REDDY at 19.1x is lower.
- ✓USFDA granted first AB-rated generic approval for Albuterol (Ventolin HFA equivalent) in April 2026, expanding the US respiratory portfolio — a concrete regulatory milestone.
- ✓Profit margin of 16.26% is a positive absolute figure in the context of a generics-heavy pharma business, and the 36-analyst coverage (rating 2.63 on a 1–5 scale, lower = more constructive) reflects broad institutional attention.
- ✓Trailing PE of 19.06 ranks 1st (lowest) among 6 Pharma peers, including Sun Pharma (40.59), Divi's (71.88), and Max Healthcare (69.48) — a notable valuation gap to sector.
- ✓Stock is above both 50-DMA (₹1,277.62) and 200-DMA (₹1,258.56) with RSI at 52.21 (neutral), and the 52-week drawdown is limited to -5.96% from the high.
- ✓FCF was positive in 4 of the available history years, indicating the business has generated cash in most recent periods despite earnings pressure.
- ✓Revenue has grown at a 5-year CAGR of 4.4%, providing a top-line base even as margins and earnings have compressed over the same period.
Cons
- ✗5-year earnings growth of -57% is a material contraction signal; combined with zero 5-year revenue growth, the top-line has stagnated while the bottom-line has compressed significantly.
- ✗Quality score of 30 ranks last (6th of 6) among tracked peers, with only 2 years of ROE above 15% in the available history — indicating inconsistent returns on equity capital.
- ✗Two concurrent USFDA compliance actions — a supplier import alert and two Form 483 observations at the Goa plant — represent active regulatory risk to supply chain continuity and product approval timelines.
- ✗Stock has been below its 200-DMA and is down 9.93% over 12 months, with a 19.49% drawdown from the 52-week high, reflecting sustained underperformance relative to its own price history.
- ✗5-year earnings CAGR of -14.3% reflects a sustained decline in profitability; ROE has cleared 15% in only 3 of the reported years.
- ✗Debt-to-equity of 18.03 is elevated and the debt trend is classified as rising, a combination that adds financial risk in a period of declining earnings.
- ✗Quality score of 32 ranks 5th out of 6 peers in the Pharma cohort, with sector peers ranging from 30 (Cipla) to 54 (Max Healthcare).
- ✗Forward PE of 23.52 exceeds the trailing PE of 19.06, indicating the current price embeds an earnings recovery expectation that the historical 5-year trend has not corroborated.
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