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The market expects much less from Cipla than it has delivered before.
At today’s share price, buyers are assuming Cipla grows about 2% a year, forever. Over the last ten years it actually grew about 7% a year. That is a big step down from its own record. Either the market can see a problem that the published accounts do not show yet, or it is expecting a slowdown that has not happened.
- How it is valued: Discounted cash flow.
- What the price assumes: 2% growth, against 7% the model takes from its own record.
- Ten-year record: Between FY2018 and FY2026, Cipla's revenue went from ₹15,219 crore to ₹28,163 crore — it compounded at about 8% a year over 8 years.
- Biggest swing factor: Complex US generics. Main risk: FDA compliance.
01Ninety years of affordable medicine
Cipla was founded in 1935 by Khwaja Abdul Hamied and became known worldwide for low-cost HIV medicines in the early 2000s. Today it is one of India's largest pharmaceutical companies, with strong positions in India, South Africa and the US.
Respiratory medicines — inhalers for asthma and lung disease — are its speciality, and they are hard to copy, which protects margins. In the US it has built a portfolio of complex generics, some of which lifted profits sharply in recent years.
02What the market is assuming
Work backwards from today's share price and you can see what buyers are quietly taking for granted. Here is the growth that price implies for Cipla, next to what the model assumes from the company's own record.
The further apart these two numbers are, the bigger the bet a buyer at today's price is making.
03Cipla's record, in plain numbers
Between FY2018 and FY2026, Cipla's revenue went from ₹15,219 crore to ₹28,163 crore — it compounded at about 8% a year over 8 years. Net profit grew from ₹1,417 crore to ₹3,862 crore, about 13% a year — faster than revenue, so margins widened. In FY2026 it kept 13.7% of revenue as net profit — against a low of 8.8% in FY2020 and a high of 19.1% in FY2025. The latest year added 2.2% to revenue, well behind its own long-run pace.
Revenue and earnings per share in ₹, return on equity and leverage as ratios — all from the filed statements.
Revenue and net profit by year (₹ crore)
| Year | Revenue | Net profit | Margin |
|---|---|---|---|
| FY2018 | 15,219 | 1,417 | 9.3% |
| FY2019 | 16,362 | 1,492 | 9.1% |
| FY2020 | 17,132 | 1,500 | 8.8% |
| FY2021 | 19,160 | 2,389 | 12.5% |
| FY2022 | 21,763 | 2,547 | 11.7% |
| FY2023 | 22,753 | 2,833 | 12.5% |
| FY2024 | 25,774 | 4,154 | 16.1% |
| FY2025 | 27,548 | 5,269 | 19.1% |
| FY2026 | 28,163 | 3,862 | 13.7% |
04How Cipla gets valued — and why
Discounted cash flowThis business is valued on the cash it is expected to generate, discounted back at its cost of capital — with growth taken from its own ten-year record rather than from guidance.
05What decides Cipla's value
Complex US generics
Inhalers and other hard-to-make products face less competition than simple pills.
India branded business
Steady, cash-rich and growing with the domestic market.
Replacing one-off gains
Some recent US profit came from products whose exclusivity is ending.
New launches
Peptides and other complex products are the next source of growth.
06What could go wrong
- FDA compliance. Inspection problems at key plants have delayed launches before.
- US price erosion. Generic prices fall as competitors enter.
- Africa currencies. South African rand moves affect reported earnings.
07What the full Cipla valuation shows
Sign in free to see the complete Cipla valuation
- ✓Fair value per share — from a ten-year discounted cash flow, every step shown
- ✓The Workbench — change revenue growth, the discount rate or terminal growth and watch Cipla's value move
- ✓Bull, base and bear cases — and exactly which assumptions move between them
- ✓Peer comparison — against Sun Pharma, Dr Reddy's and Divi's Laboratories
- ✓Downloadable report — the full write-up, yours to keep
08Compare Cipla with peers
The same valuation, run side by side.
Cipla vs Sun PharmaThe largest Indian pharma, on a broader US book.→Cipla vs Dr Reddy'sThe closest peer on US-generics exposure.→Cipla vs Divi's LaboratoriesA branded book against pure contract manufacturing.→09Questions people ask about Cipla
What is Cipla best known for?
Respiratory medicines, especially inhalers, and its long history of making affordable medicines for emerging markets.
Why did Cipla's profit drop in FY2026?
Largely because some high-margin US products faced new competition. The record paragraph shows how margins moved year by year.
Cipla or Dr Reddy's — which is better value?
Both are valued on the same cash-flow model; the comparison page sets them side by side.
Is Cipla overvalued?
At ₹1,392 the market is pricing in roughly 2% sustained growth, against the ~7% its own record supports. That is less than it has delivered — on these numbers the market is asking the business for less than its own record, which usually means it doubts the record repeats.
What is the intrinsic value of Cipla?
It is computed from the filed financial statements using the method that fits this business (discounted cash flow), with every assumption shown alongside the result. The per-share figure and the full working are in the report.
How much debt does Cipla carry?
Debt to equity stands at 0.00, against 0.00 at the start of the period — the balance sheet is a core input to the cost of capital used here.