CIPLA vs SUNPHARMA
Side-by-side comparison of Cipla Ltd. and Sun Pharmaceutical Industries Ltd.. Descriptive only — not investment advice.
Cipla Ltd.
Pharma
Quality Score: 51/100
Sun Pharmaceutical Industries Ltd.
Pharma
Quality Score: 69/100
At a glance
| Metric | CIPLA | SUNPHARMA |
|---|---|---|
| Quality Score | 51/100 | 69/100 |
| P/E (trailing) | 28.2 | 38.5 |
| Forward P/E | 21.4 | 28.5 |
| ROE | +11.7% | +14.7% |
| Profit margin | +13.9% | +19.6% |
| Debt-to-equity | 1.78 | 5.52 |
| Dividend yield | +0.96% | +0.87% |
| 1Y price return | -8.3% | +12.5% |
| From 52w high | -18.4% | -4.1% |
| Analyst rating1 = Strong Buy, 5 = Strong Sell | 2.32 | 1.65 |
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.
Sun Pharmaceutical Industries trades at ₹1,838.3, up 12.49% over 12 months and 5.38% over 3 months, sitting above both its 50-DMA (₹1,791) and 200-DMA (₹1,725) with RSI at 59. The stock commands a trailing PE of 38.5 (forward PE 28.5) on a 5-year earnings CAGR of 25.6%, while carrying a D/E ratio of 5.517 that stands as the primary balance-sheet watch point. A ~$1 billion acquisition in the US market, funded by SBI, has emerged as the key near-term corporate event as of June 2026.
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.
- ✓Highest quality score among the 6-stock peer group (59 vs. peer range 24–51), combining profitability, consistency, and balance-sheet trajectory into a composite leadership position within the sector.
- ✓5-year earnings CAGR of 25.6% and revenue CAGR of 12.8% reflect compounding over a full business cycle, with FCF positive in 4 of the tracked years and debt trend classified as falling.
- ✓Price is above both the 50-DMA (₹1,791) and 200-DMA (₹1,725) with a drawdown of only 4.09% from its 52-week high, indicating the stock has maintained relative price strength while sector peers lack comparable 1-year price data.
- ✓Forward PE of 28.5 represents a 26% compression from the trailing PE of 38.5, implying that consensus earnings estimates embed meaningful growth in the next fiscal year relative to the trailing reported figure.
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.
- ✗D/E of 5.517 is materially elevated for a pharma manufacturer; the ~$1 billion US acquisition announced in June 2026 and funded by SBI carries execution and integration risk that could further stretch a balance sheet where leverage is already the primary fundamental concern.
- ✗ROE of 14.72% has exceeded 15% in only 3 of the tracked years; a 5-year earnings CAGR of 25.6% has not consistently translated into above-median returns on equity, and the quality consistency score of 73 reflects intermittent rather than structural persistence.
- ✗Profit margin of 19.64% is solid in absolute terms, but the Q4 FY26 earnings release was accompanied by cost-pressure commentary, highlighting that margin sustainability is an active variable rather than a given as the company pursues US-market expansion.
- ✗At PE 38.5, the stock trades at a 38% premium to Cipla (28.2) and a 56% premium to Dr. Reddys (24.7); sustaining that valuation gap requires continued earnings delivery at a pace that has historically been intermittent at the ROE level.
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