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: 41/100
At a glance
| Metric | CIPLA | DRREDDY |
|---|---|---|
| Quality Score | 51/100 | 41/100 |
| P/E (trailing) | 28.2 | 24.7 |
| Forward P/E | 21.4 | 19.6 |
| ROE | +11.7% | +11.8% |
| Profit margin | +13.9% | +12.8% |
| Debt-to-equity | 1.78 | 20.33 |
| Dividend yield | +0.96% | +0.63% |
| 1Y price return | -8.3% | -2.9% |
| From 52w high | -18.4% | -7.5% |
| Analyst rating1 = Strong Buy, 5 = Strong Sell | 2.32 | 2.72 |
Highlighted value = better on the metric (lower for P/E, D/E, drawdown, analyst rating; higher elsewhere). Descriptive only.
Snapshots
Cipla (₹1,351.8) is an established Indian pharmaceutical company currently trading 4.1% below its 200-DMA after a 10.1% recovery over the past three months. With a trailing PE of 28.2 and a qualityScore of 24 — lowest among the six tracked Pharma peers — the stock reflects compressed profitability metrics alongside a 5-year earnings decline of 54.6%. A forward PE of 21.4 indicates the market is pricing in a meaningful earnings uptick from current levels.
Dr. Reddy's Laboratories (DRREDDY) trades at ₹1,272 with a trailing PE of 24.66 and a forward PE of 19.64, sitting just below its 50-DMA (₹1,287) but above its 200-DMA (₹1,265). The stock is -2.93% over 12 months against a pharma peer group where 1-year price changes are unavailable for direct comparison. Fundamental metrics show 5-year earnings growth of -86.2% and a debt-to-equity of 20.33 (rising trend), alongside an ROE of 11.84% — the weakest quality score in a 6-stock pharma cohort.
Pros
- ✓Debt trend is falling, with D/E at 1.778 — a directional improvement that reduces balance-sheet stress over time.
- ✓FCF was positive in 4 of the measured years, indicating the business generates cash in most periods despite earnings volatility.
- ✓Promoters declared zero shares encumbered in FY26, signalling no pledging overhang on insider holdings.
- ✓Dividend yield of 0.96% provides a modest income return, and the company has sustained dividend payments despite profit-margin pressure.
- ✓FCF has been positive in 4 of the available historical years, indicating the business has generated cash despite earnings volatility.
- ✓Forward PE of 19.64 represents a ~20% discount to the trailing PE of 24.66, which the consensus of 39 analysts (mean rating 2.72 on a 1-5 scale, lower = more constructive) may reflect in expectations of an earnings recovery.
- ✓June 2026 first-to-market U.S. launch of generic Bosutinib (400mg) adds a pipeline catalyst in the oncology generics segment, expanding the U.S. generics portfolio.
- ✓Trailing PE of 24.66 is the lowest in the 6-stock pharma peer cohort, where peers range from Cipla at 28.2 to Divi's at 70.0, positioning DRREDDY at the low-valuation end of the sector on this metric.
Cons
- ✗5-year earnings growth of -54.6% reflects sustained bottom-line compression; ROE of 11.74% cleared the 15% threshold in only 2 of the measured years.
- ✗QualityScore of 24 is the lowest among 6 tracked Pharma peers, behind Sun Pharma (59), Divi's (51), Apollo Hospitals (44), Max Healthcare (37), and Dr. Reddy's (25).
- ✗Price remains 4.1% below the 200-DMA of ₹1,408.92 with an 18.44% drawdown from the 52-week high, reflecting sustained longer-term underperformance relative to trend.
- ✗New government regulations tightening cough-syrup sales (June 2026) introduce revenue risk in a key product category, contributing to sector-wide selling pressure.
- ✗5-year earnings growth of -86.2% and 5-year revenue growth of -11.6% represent sustained multi-year deterioration; the company was among those cited as reporting declining EPS for 4 straight consecutive quarters.
- ✗Debt-to-equity of 20.33 with a rising debt trend is substantially elevated for a pharma manufacturer; this combination of high leverage and contracting earnings increases balance sheet sensitivity.
- ✗ROE of 11.84% clears the 15% threshold in only 3 of available historical years, and the quality score of 25 ranks last in the 6-peer cohort (sector leader Sun Pharma at 59, Divi's at 51).
- ✗Consistency score of 40/100 reflects limited earnings durability; ROE persistence below 15% in the majority of measured years suggests structural rather than cyclical profitability pressure.
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For informational purposes only. Not investment advice. VivaTrades is not a SEBI-registered Investment Adviser or Research Analyst. Comparison reflects current public data; consult a registered adviser before any investment decision.