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: 65/100
At a glance
| Metric | CIPLA | SUNPHARMA |
|---|---|---|
| Quality Score | 51/100 | 65/100 |
| P/E (trailing) | 23.9 | 40.6 |
| Forward P/E | 24.4 | 32.6 |
| ROE | — | — |
| Profit margin | +16.3% | +19.2% |
| Debt-to-equity | 1.42 | 6.67 |
| Dividend yield | +0.97% | +0.89% |
| 1Y price return | -9.9% | +2.6% |
| From 52w high | -19.5% | -0.5% |
| Analyst rating1 = Strong Buy, 5 = Strong Sell | 2.64 | 1.53 |
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.
Sun Pharma trades at ₹1,847.9, above both its 50-DMA (₹1,752.84) and 200-DMA (₹1,696.21), near its 52-week high (drawdown of -0.53%), with a trailing PE of 40.58 and forward PE of 32.61. The dominant recent event is the announced $11.75 billion acquisition of US-listed Organon, India's largest-ever pharma deal, which has driven uniformly positive news sentiment across 8 tracked headlines. Reported D/E of 6.675 is already elevated for the sector and the acquisition's financing structure will be a key variable for leverage trajectory.
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.
- ✓5-year revenue CAGR of 13.5% and earnings CAGR of 15.7% reflect sustained compounding; forward PE of 32.61 represents a 19.6% compression versus trailing PE of 40.58, implying market expectation of continued earnings growth.
- ✓Price is above both 50-DMA (₹1,752.84) and 200-DMA (₹1,696.21), with the stock within 0.53% of its 52-week high and up 9.12% over the past 3 months.
- ✓Quality score of 50 ranks 2nd of 6 in the peer group, ahead of Cipla (30), Dr. Reddy's (32), Divi's Lab (34), and Apollo Hospitals (42), with only Max Healthcare (54) scoring higher.
- ✓FCF was positive in 4 of the tracked years, and the Organon deal, if executed, would expand Sun Pharma's US specialty portfolio and geographic diversification.
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.
- ✗D/E of 6.675 is materially elevated for a pharma company; if the $11.75 billion Organon deal is predominantly debt-funded, leverage could increase significantly, amplifying financial risk in a rate-sensitive environment.
- ✗ROE cleared the 15% threshold in only 3 of tracked years, indicating that high top-line and bottom-line growth has not consistently translated into strong returns on equity; debt trend is additionally marked as rising.
- ✗Profit margin of 19.21% and quality score of 50 are mid-range; the stock's PE of 40.58 is the third-highest among the 6 peer group (below Divi's at 71.88, Max Healthcare at 69.48, Apollo at 64.58), pricing in a growth premium that depends on deal execution.
- ✗FCF positivity in 4 of tracked years means 1 or more years recorded negative FCF; combined with rising debt and a large pending acquisition, cash generation consistency is a metric to monitor closely post-deal close.
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