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Cipla Ltd.

Large Cap

Evaluated by 4004 users |

BSE

: 500087 |

NSE

: CIPLA |

Pharmaceuticals & Drugs

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Analysis of Financial Track Record

Data adjusted to bonus, split, extra-ordinary income, rights issue and change in financial year end
10 Year X-Ray
MoneyWorks4me Colour Coding
Value Creation To be investment worthy, a company has to create a shareholder value in excess of its cost of capital employed. VCI (Value Creation Index) shows how efficient has the company been in doing this.
Value Creation Index: Colour Rating Guide
  • >0.25 : Very Good
  • 0 to 0.25 : Somewhat Good
  • <0: Not Good
 Mar'04Mar'05Mar'06Mar'07Mar'08Mar'09Mar'10Mar'11Mar'12Mar'13
Return on Capital Employed
The return on capital employed gives a sense of how well a company is using its money to generate returns.
23.74%23.43%27.02%22.42%17.36%20.32%19.25%14.65%15.33%16.98%
Value Creation Index
The difference between ROCE and WACC as a Proportion of WACC reveals the extent of value created by a company.
Ie. (ROCE-WACC)/WACC
ROCE is Return on Capital Employed
WACC is Weighted Average Cost of Capital
1.731.031.250.750.601.211.090.400.36NA
Growth Parameters Growth Parameters help gauge a company's growth in the past 10 years. A value creating company needs to grow at a sustainable pace to continue creating value.
For Net Sales and EPS Growth Rate
  • >12% : Very Good
  • 8% to 12% : Somewhat Good
  • <8% : Not Good
For Debt To CFO
  • 0 to <1.5 : Very Good
  • 1.5 to <3 : Somewhat Good
  • >3 or <0: Not Good
Net Sales (Rs. Cr.)
Net Sales is calculated by deducting excise duty, sales tax and other such deductible indirect taxes from the gross sales of a company.
1,8422,1812,8913,4383,9984,9615,3606,3316,9788,202
Y-o-Y Gr. Rt.-18.4%32.6%18.9%16.3%24.1%8%18.1%10.2%17.6%
Adjusted EPS (Rs.)
Adjusted Earning per Share is the company’s net profit per share after adjusting for extra-ordinary/exceptional items
4.054.927.418.288.3912.0613.1911.7313.7218.11
Y-o-Y Gr. Rt.-21.5%50.6%11.7%1.3%43.7%9.4%-11.1%17%32%
Book Value per Share (Rs.)
The total value that a company will fetch upon liquidation (if it is closed down), after settling all obligations is called its Book Value. Book value of a company includes only tangible assets. Book value allocated to each outstanding share is called Book Value per share
16.7320.5926.3341.5248.255.8673.5582.2593.93110.36
Adjusted Net Profit Adjusted Net Profit is a measure of company's profitability after accounting for all costs and adjusting for one time events. 3043695566446529381,0599421,1021,454
Net Op. Cash Flow (Rs. Cr.)
This refers to the amount of cash a company generates from the revenues less operating expenses.
2512002773343803761,0429871,6451,381
Debt to Cash Flow from Ops
Debt to CFO (Cash Flow from Operations) conveys the number of years it will take for a company to repay its debt, given the cash generated from operations.
CFO: It is the amount of cash generated by the company through its core business operations without looking at the impact of its capital structure. It indicates whether the company is able to generate sufficient cash from its operations to maintain and run its operations.
0.840.961.690.371.422.500.450.010.7
CAGR
The Growth rate helps you understand how the company has performed over different time frames.
CAGR Colour Code Guide
CAGR Colour Code Guide
  • >12% : Very Good
  • 8% to 12% : Somewhat Good
  • <8% : Not Good
  9 yrs 5 yrs 3 yrs 1 yr
Net Sales
Net Sales is calculated by deducting excise duty, sales tax and other such deductible indirect taxes from the gross sales of a company.
18.1%15.5%15.2%17.6%
Adjusted EPS
Adjusted Earning per Share is the Company’s net profit per share after adjusting for extra-ordinary/exceptional items.
18.1%16.6%11.2%32%
Book Value per Share
The total value that a company will fetch upon liquidation (if it is closed down), after settling all obligations is called its Book Value. Book value of a company includes only tangible assets. Book value allocated to each outstanding share is called Book Value per share
23.31814.517.5
Key Financial Parameter The key financial ratios show the growth and sustainability of the Value Creation Index.
Performance Ratios: Colour Rating Guide
  • >12% : Very Good
  • 8% to 12% : Somewhat Good
  • <8% : Not Good
Debt to Equity Colour Rating Guide
  • 0 to 1 : Very Good
  • >1 to 2 : Somewhat Good
  • >2 or <0: Not Good
Return on Equity (%)
Return on Equity shows the amount of net profit generated as a percentage of shareholders equity. 
ROE measures a company's profitability over the money shareholders have invested. 
26.0326.1931.4224.6618.6623.1320.6415.0315.5617.71
Operating Profit Margin (%)
Operating Profit Margin shows how much profit a company makes (before interest payment and taxes) on sales. It is advisable to look at the change in a company’s operating margin over time and compare the company's yearly or quarterly numbers to those of its competitors.
18.5419.8121.120.1315.819.821.1720.9423.226.03
Net Profit Margin (%)
NPM (Net Profit Margin) is the ratio of profit, net of taxes and interests to sales. It is advisable to look at changes in a company’s NPM over time and to compare them with the competitor’s NPM.
16.4916.9219.2218.7216.3218.919.7714.8715.7917.72
Debt to Equity
This ratio indicates the ratio of equity to debt the company employs to finance its operating assets.
0.170.120.240.040.140.2200.0700.11
Working Capital Days
This is the number of days that a company will take to convert its working capital into revenue.
250248241256284318360306263236
Cash Conversion Cycle
Cash Conversion Cycle is a company's net working capital (creditors, debtors and inventory) expressed in terms of days
137144138147155150143130125114
Management Assessment
Management Assessment
An assessment of the trustworthiness of the management based on 5 important parameters. These parameters are colour coded as
Green (Very Good), Orange (Somewhat Good) and Red (Not Good)
What do we look at?
Management Assessment: An assessment of the trustworthiness of the management based
on 5 important parameters. These parameters are colour coded as Green (Very Good),
Orange (Somewhat Good) and Red (Not Good)
Corporate Governance
Corporate Governance
This refers to a set of processes or laws that affects the way a company is directed and controlled.
Board Credentials
Board credentials
This refers to the skill sets (qualification, experience, etc.) that the management team of a company possesses.
Promoter's holding
Promoter's holding
This refers to the stake that the promoters hold in a company and proportion of shares pledged.
Transparency
Transparency
Transparency refers to the practices that a company follows in the disclosure of important and necessary information.
Integrity
Integrity
Integrity refers to the application of honest and fair business practices.

Percentage Holding
36.80%
34.39%
27.67%
1.14%

Pledged *0.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.00
*  Pledged shares as % of Promoter's holding (%)

The 10 YEAR X-RAY of Cipla Ltd. shows that the performance of the company has been very good over the last 10 years. Cipla is one of the few companies which have shown consistent high positive value creation index, over the last 10 years. ROE and ROCE figures have been very good with 6 year average figures of ~20% and ~18% respectively. Both figures have come down a bit over the last 2 years owing to lower net profit margins and asset turnover ratios. Cipla saw ... Read more

The 10 YEAR X-RAY of Cipla Ltd. shows that the performance of the company has been very good over the last 10 years. Cipla is one of the few companies which have shown consistent high positive value creation index, over the last 10 years. ROE and ROCE figures have been very good with 6 year average figures of ~20% and ~18% respectively. Both figures have come down a bit over the last 2 years owing to lower net profit margins and asset turnover ratios. Cipla saw a drop in the return ratios over the past 3 years due to high capex and slowdown in the ramp up of existing facilities. Cipla has spent over Rs. 2660 Cr. in the past 4 years on expansions and upgradation of its formulations and API facilities. Despite this value creation index has been more than our benchmark of 0.25 for all the years.

On the growth front as well, Net Sales have consistently grown at high growth rates well above our benchmark of 12%; except for FY 2010 and FY 2012. Unlike some of its competitors, Cipla gets a lower share of its revenues from US – which is the biggest market for Indian generic manufacturers. As a result, it has failed to show similar growth rates. Similarly, EPS growth has also been impacted over the last few years with the 5 year CAGR at just 10%. However, the performance has shown signs of improvement in FY 2013.

Company has shown good, consistent cash flow from operations driven by efficient working capital management. Its cash conversion cycle has decreased from ~150 days in FY 2009 to ~130 days in FY 2012. This improvement has come largely due to reduction in receivable days from ~120 days to ~80 days. Inventory days have been more or less constant at ~90 days.

As far as debt is considered, the company is virtually a debt-free company with a debt of just Rs. 13 Cr. compared to Net Profit of Rs. 1100 Cr. as of FY 2012.

Thus, considering all these parameters, we can say that the 10 YEAR X-RAY of Cipla Ltd. is Green (Very Good).

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