List of Content:

Historical Financials
Ratio Analysis
Common Size Satement
Forecasting
Beta
Intrinsic Growth
DCF Valuation
Relative Valuation
Value at Risk
Sensitivity Analysis
Football Field Analysis
Dupont Analysis
Altman Z Score

Page 1 of 17
 HISTORICAL FINANCIALS
Historical Financial Statement - CIPLA LTD
Years Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 LTM

# Income Statement
Sales ₹ 10,173.4 ₹ 11,345.4 ₹ 13,790.1 ₹ 14,394.3 ₹ 15,155.7 ₹ 16,362.4 ₹ 17,132.0 ₹ 19,159.6 ₹ 21,763.3 ₹ 22,753.1 ₹ 25,350.2
Sales Growth - 11.52% 21.55% 4.38% 5.29% 7.96% 4.70% 11.84% 13.59% 4.55% 11.41%

COGS ₹ 6,175.1 ₹ 7,097.9 ₹ 8,772.2 ₹ 9,122.2 ₹ 9,388.6 ₹ 9,913.8 ₹ 10,372.8 ₹ 11,995.6 ₹ 13,556.4 ₹ 13,653.1 ₹ 19,201.2
COGS % Sales 60.70% 62.56% 63.61% 63.37% 61.95% 60.59% 60.55% 62.61% 62.29% 60.01% 75.74%

Gross Profit ₹ 3,998.26 ₹ 4,247.54 ₹ 5,017.88 ₹ 5,272.12 ₹ 5,767.13 ₹ 6,448.64 ₹ 6,759.22 ₹ 7,163.99 ₹ 8,206.93 ₹ 9,099.99 ₹ 6,148.93
Gross Margins 39.30% 37.44% 36.39% 36.63% 38.05% 39.41% 39.45% 37.39% 37.71% 39.99% 24.26%

Selling & General Expenses ₹ 1,851.32 ₹ 2,084.67 ₹ 2,538.21 ₹ 2,775.81 ₹ 2,940.75 ₹ 3,351.33 ₹ 3,553.23 ₹ 2,911.56 ₹ 3,654.15 ₹ 4,073.02
S&G Exp % Sales 18.20% 18.37% 18.41% 19.28% 19.40% 20.48% 20.74% 15.20% 16.79% 17.90% 0.00%

EBITDA ₹ 2,146.94 ₹ 2,162.87 ₹ 2,479.67 ₹ 2,496.31 ₹ 2,826.38 ₹ 3,097.31 ₹ 3,205.99 ₹ 4,252.43 ₹ 4,552.78 ₹ 5,026.97 ₹ 6,367.69
EBITDA Margins 21.10% 19.06% 17.98% 17.34% 18.65% 18.93% 18.71% 22.19% 20.92% 22.09% 25.12%

Interest ₹ 145.74 ₹ 168.29 ₹ 206.63 ₹ 159.38 ₹ 114.23 ₹ 168.43 ₹ 197.36 ₹ 160.70 ₹ 106.35 ₹ 109.54 ₹ 106.65
Interest % Sales 1.43% 1.48% 1.50% 1.11% 0.75% 1.03% 1.15% 0.84% 0.49% 0.48% 0.42%

Depreciation ₹ 372.64 ₹ 504.71 ₹ 754.22 ₹ 1,322.93 ₹ 1,322.82 ₹ 1,326.31 ₹ 1,174.65 ₹ 1,067.66 ₹ 1,051.95 ₹ 1,172.11 ₹ 1,108.90
Depreciation%Sales 3.66% 4.45% 5.47% 9.19% 8.73% 8.11% 6.86% 5.57% 4.83% 5.15% 4.37%

Earnings before interest Tax (EBIT) ₹ 1,774.30 ₹ 1,658.16 ₹ 1,725.45 ₹ 1,173.38 ₹ 1,503.56 ₹ 1,771.00 ₹ 2,031.34 ₹ 3,184.77 ₹ 3,500.83 ₹ 3,854.86 ₹ 5,258.79
EBIT Margins 17.44% 14.62% 12.51% 8.15% 9.92% 10.82% 11.86% 16.62% 16.09% 16.94% 20.74%

Earnings Before Tax ₹ 1,628.56 ₹ 1,489.87 ₹ 1,518.82 ₹ 1,014.00 ₹ 1,389.33 ₹ 1,602.57 ₹ 1,834.0 ₹ 3,024.1 ₹ 3,394.5 ₹ 3,745.3 ₹ 5,152.1
EBT % Sales 16.01% 13.13% 11.01% 7.04% 9.17% 9.79% 10.71% 15.78% 15.60% 16.46% 20.32%

Tax ₹ 463.4 ₹ 400.0 ₹ 331.6 ₹ 179.8 ₹ 250.1 ₹ 569.5 ₹ 631.2 ₹ 888.8 ₹ 933.8 ₹ 1,202.9 ₹ 1,444.0
Effective Tax Rate 28.45% 26.85% 21.83% 17.73% 18.00% 35.54% 34.42% 29.39% 27.51% 32.12% 28.03%

Net Profit ₹ 1,165.2 ₹ 1,089.8 ₹ 1,187.2 ₹ 834.2 ₹ 1,139.2 ₹ 1,033.0 ₹ 1,202.8 ₹ 2,135.3 ₹ 2,460.7 ₹ 2,542.5 ₹ 3,708.2
Net Margins 11.45% 9.61% 8.61% 5.80% 7.52% 6.31% 7.02% 11.14% 11.31% 11.17% 14.63%

No of Equity Shares 80.29 80.3 80.34 80.45 80.51 80.57 80.62 80.65 80.68 80.72 80.72

Earnings per Share ₹ 14.51 ₹ 13.57 ₹ 14.78 ₹ 10.37 ₹ 14.15 ₹ 12.82 ₹ 14.92 ₹ 26.48 ₹ 30.50 ₹ 31.50 ₹ 45.94
EPS Growth % -6.48% 8.88% -29.83% 36.46% -9.39% 16.36% 77.47% 15.19% 3.27% 45.85%

Dividend per Share ₹ 2.00 ₹ 2.00 ₹ 2.0 ₹ 2.0 ₹ 3.0 ₹ 3.0 ₹ 4.0 ₹ 5.0 ₹ 5.0 ₹ 8.5 -
Dividend payout ratio 13.78% 14.74% 13.53% 19.29% 21.20% 23.40% 26.81% 18.88% 16.39% 26.98% 0.00%

Retained Earnings 86.22% 85.26% 86.47% 80.71% 78.80% 76.60% 73.19% 81.12% 83.61% 73.02% 100.00%

Page 2 of 17
 HISTORICAL FINANCIALS

Historical Financial Statement - CIPLA LTD

# Years Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23

# Balance Sheet
Equity Share Capital ₹ 160.6 ₹ 160.6 ₹ 160.7 ₹ 160.9 ₹ 161.0 ₹ 161.1 ₹ 161.3 ₹ 161.3 ₹ 161.4 ₹ 161.4
Reserves ₹ 9,889.8 ₹ 10,640.9 ₹ 11,355.5 ₹ 12,382.8 ₹ 14,068.2 ₹ 14,851.1 ₹ 15,601.8 ₹ 18,165.2 ₹ 20,680.3 ₹ 23,246.4
Borrowings ₹ 1,247.9 ₹ 1,703.3 ₹ 5,201.9 ₹ 4,112.7 ₹ 4,098.1 ₹ 4,316.2 ₹ 2,816.4 ₹ 2,014.4 ₹ 1,055.8 ₹ 803.1
Other Liabilities ₹ 2,102.1 ₹ 3,165.6 ₹ 4,331.4 ₹ 4,212.6 ₹ 4,345.7 ₹ 4,433.4 ₹ 4,843.4 ₹ 4,514.3 ₹ 4,959.7 ₹ 5,089.1
Total Liabilities ₹ 13,400.4 ₹ 15,670.4 ₹ 21,049.5 ₹ 20,868.9 ₹ 22,672.9 ₹ 23,761.9 ₹ 23,422.8 ₹ 24,855.3 ₹ 26,857.2 ₹ 29,300.0

Fixed Assets Net Block ₹ 6,496.5 ₹ 6,829.6 ₹ 9,368.3 ₹ 9,492.0 ₹ 9,950.2 ₹ 9,608.4 ₹ 9,682.9 ₹ 9,515.5 ₹ 9,683.3 ₹ 9,160.5
Capital Work in Progress ₹ 441.8 ₹ 580.9 ₹ 2,060.9 ₹ 1,683.0 ₹ 981.3 ₹ 676.2 ₹ 824.5 ₹ 968.9 ₹ 766.2 ₹ 1,093.3
Investments ₹ 708.6 ₹ 639.8 ₹ 758.7 ₹ 973.0 ₹ 1,258.8 ₹ 2,554.1 ₹ 1,471.0 ₹ 2,710.1 ₹ 2,550.6 ₹ 3,662.4
Other Assets ₹ 1,043.6 ₹ 1,277.5 ₹ 1,825.9 ₹ 2,048.4 ₹ 2,369.8 ₹ 2,188.9 ₹ 2,171.5 ₹ 2,144.7 ₹ 3,153.9 ₹ 4,605.8
Total Non Current Assets ₹ 8,690.5 ₹ 9,327.8 ₹ 14,013.8 ₹ 14,196.4 ₹ 14,560.1 ₹ 15,027.6 ₹ 14,150.0 ₹ 15,339.2 ₹ 16,154.0 ₹ 18,522.0

Receivables ₹ 1,638.9 ₹ 1,997.7 ₹ 2,356.3 ₹ 2,563.1 ₹ 3,102.5 ₹ 4,150.7 ₹ 3,891.3 ₹ 3,445.7 ₹ 3,424.4 ₹ 4,057.0
Inventory ₹ 2,895.3 ₹ 3,780.6 ₹ 3,808.1 ₹ 3,485.3 ₹ 4,044.7 ₹ 3,964.8 ₹ 4,377.6 ₹ 4,669.2 ₹ 5,350.2 ₹ 5,156.4
Cash & Bank ₹ 175.8 ₹ 564.3 ₹ 871.4 ₹ 624.2 ₹ 965.6 ₹ 618.8 ₹ 1,003.9 ₹ 1,401.2 ₹ 1,928.5 ₹ 1,564.6
Total Current Assets ₹ 4,709.9 ₹ 6,342.6 ₹ 7,035.7 ₹ 6,672.5 ₹ 8,112.8 ₹ 8,734.4 ₹ 9,272.8 ₹ 9,516.1 ₹ 10,703.2 ₹ 10,778.1

Total Assets ₹ 13,400.4 ₹ 15,670.4 ₹ 21,049.5 ₹ 20,868.9 ₹ 22,672.9 ₹ 23,761.9 ₹ 23,422.8 ₹ 24,855.3 ₹ 26,857.2 ₹ 29,300.0

Check TRUE TRUE TRUE TRUE TRUE TRUE TRUE TRUE TRUE TRUE

# Cash Flow Statements

Operating activities
Profit from operations ₹ 2,433.0 ₹ 2,284.0 ₹ 2,678.0 ₹ 2,597.0 ₹ 2,963.0 ₹ 3,348.0 ₹ 3,544.0 ₹ 4,421.0 ₹ 4,643.0 ₹ 5,099.0
Receivables (₹ 251.0) (₹ 443.0) ₹ 77.0 (₹ 288.0) (₹ 855.0) (₹ 1,015.0) ₹ 217.0 ₹ 423.0 ₹ 81.0 (₹ 652.0)
Inventory (₹ 175.0) (₹ 833.0) (₹ 65.0) ₹ 323.0 (₹ 559.0) ₹ 104.0 (₹ 332.0) (₹ 254.0) (₹ 621.0) ₹ 111.0
Payables (₹ 135.0) ₹ 557.0 (₹ 441.0) ₹ 201.0 ₹ 636.0 (₹ 153.0) ₹ 487.0 ₹ 203.0 ₹ 362.0 (₹ 18.0)
Working capital changes (₹ 561.0) (₹ 719.0) (₹ 429.0) ₹ 235.0 (₹ 778.0) (₹ 1,064.0) ₹ 373.0 ₹ 372.0 (₹ 177.0) (₹ 559.0)
Direct taxes (₹ 308.0) (₹ 392.0) (₹ 508.0) (₹ 450.0) (₹ 722.0) (₹ 593.0) (₹ 848.0) (₹ 1,037.0) (₹ 1,140.0) (₹ 1,302.0)
Cash Flow from Op. activity ₹ 1,564.0 ₹ 1,173.0 ₹ 1,741.0 ₹ 2,382.0 ₹ 1,463.0 ₹ 1,691.0 ₹ 3,069.0 ₹ 3,756.0 ₹ 3,326.0 ₹ 3,238.0

Investing Activites
Fixed assets purchased (₹ 570.0) (₹ 646.0) (₹ 1,077.0) (₹ 1,136.0) (₹ 816.0) (₹ 527.0) (₹ 1,000.0) (₹ 819.0) (₹ 701.0) (₹ 1,183.0)
Fixed assets sold ₹ 3.0 ₹ 21.0 ₹ 24.0 ₹ 38.0 ₹ 77.0 ₹ 23.0 ₹ 14.0 ₹ 28.0 ₹ 20.0 ₹ 47.0
Investments purchased (₹ 18,029.0) (₹ 20,564.0) (₹ 15,940.0) (₹ 198.0) (₹ 190.0) (₹ 910.0) - (₹ 1,245.0) - (₹ 888.0)
Investments sold ₹ 19,842.0 ₹ 20,525.0 ₹ 15,950.0 ₹ 137.0 ₹ 10.0 ₹ 84.0 ₹ 1,210.0 - ₹ 171.0 -
Investment income - - - - - - - - - -
Interest received ₹ 19.0 ₹ 10.0 ₹ 9.0 ₹ 12.0 ₹ 30.0 ₹ 38.0 ₹ 50.0 ₹ 41.0 ₹ 47.0 ₹ 114.0
Dividends received ₹ 74.0 ₹ 22.0 - - ₹ 4.0 ₹ 34.0 - ₹ 22.0 - -
Investment in group cos (₹ 11.0) - (₹ 13.0) (₹ 3.0) - - - - (₹ 18.0) (₹ 51.0)
Redemp n Canc of Shares - - - ₹ 21.0 ₹ 143.0 - ₹ 1.0 ₹ 3.0 - ₹ 26.0
Acquisition of companies (₹ 2,578.0) (₹ 314.0) (₹ 3,482.0) (₹ 188.0) (₹ 14.0) (₹ 421.0) (₹ 33.0) (₹ 14.0) - -
Inter corporate deposits - - ₹ 1.0 - - - - - - -
Other investing items (₹ 15.0) (₹ 3.0) (₹ 4.0) ₹ 13.0 (₹ 77.0) (₹ 8.0) (₹ 128.0) (₹ 389.0) (₹ 1,377.0) (₹ 442.0)
Cash flow from Investing activity (₹ 1,265.0) (₹ 949.0) (₹ 4,532.0) (₹ 1,304.0) (₹ 833.0) (₹ 1,687.0) ₹ 114.0 (₹ 2,373.0) (₹ 1,858.0) (₹ 2,377.0)

Financing Activity
Proceeds from shares - - ₹ 3.0 ₹ 12.0 - - - - - -
Proceeds from borrowings ₹ 156.0 ₹ 508.0 ₹ 3,508.0 ₹ 3,652.0 - ₹ 48.0 ₹ 264.0 ₹ 70.0 ₹ 35.0 -
Repayment of borrowings (₹ 112.0) - (₹ 66.0) (₹ 4,733.0) (₹ 34.0) (₹ 108.0) (₹ 1,948.0) (₹ 1,064.0) (₹ 1,041.0) (₹ 352.0)
Interest paid fin (₹ 121.0) (₹ 167.0) (₹ 161.0) (₹ 159.0) (₹ 118.0) (₹ 159.0) (₹ 164.0) (₹ 121.0) (₹ 76.0) (₹ 65.0)
Dividends paid (₹ 161.0) (₹ 161.0) (₹ 159.0) (₹ 161.0) (₹ 161.0) (₹ 242.0) (₹ 564.0) - (₹ 403.0) (₹ 404.0)
Financial liabilities - - - - - - (₹ 76.0) (₹ 84.0) (₹ 92.0) (₹ 134.0)
Share application money - ₹ 12.0 - - - - - - - -
Other financing items (₹ 27.0) (₹ 27.0) (₹ 20.0) ₹ 63.0 (₹ 72.0) ₹ 112.0 (₹ 461.0) (₹ 41.0) (₹ 23.0) (₹ 4.0)
Cash flow from Financing Activity (₹ 265.0) ₹ 165.0 ₹ 3,105.0 (₹ 1,326.0) (₹ 385.0) (₹ 349.0) (₹ 2,949.0) (₹ 1,240.0) (₹ 1,600.0) (₹ 959.0)

Net Cash Flows ₹ 34.0 ₹ 389.0 ₹ 314.0 (₹ 248.0) ₹ 245.0 (₹ 345.0) ₹ 234.0 ₹ 143.0 (₹ 132.0) (₹ 98.0)

Page 3 of 17
 RATIO ANALYSIS
Ratio Analysis of - CIPLA LTD
Years Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Trend Mean Median

# SalesGrowth 11.52% 21.55% 4.38% 5.29% 7.96% 4.70% 11.84% 13.59% 4.55% 9.49% 7.96%
EBITDA Growth 0.74% 14.65% 0.67% 13.22% 9.59% 3.51% 32.64% 7.06% 10.42% 10.28% 9.59%
EBIT Growth -6.55% 4.06% -32.00% 28.14% 17.79% 14.70% 56.78% 9.92% 10.11% 11.44% 10.11%
Net Profit Growth -6.47% 8.94% -29.73% 36.56% -9.32% 16.43% 77.53% 15.24% 3.32% 12.50% 8.94%
Dividend Growth -0.01% 0.01% 0.00% 50.00% 0.00% 33.34% 24.98% 0.01% 69.99% 19.81% 0.01%

# Gross Margin 39.30% 37.44% 36.39% 36.63% 38.05% 39.41% 39.45% 37.39% 37.71% 39.99% 38.18% 37.88%
EBITDA Margin 21.10% 19.06% 17.98% 17.34% 18.65% 18.93% 18.71% 22.19% 20.92% 22.09% 19.70% 19.00%
EBIT Margin 17.44% 14.62% 12.51% 8.15% 9.92% 10.82% 11.86% 16.62% 16.09% 16.94% 13.50% 13.56%
EBT Margin 16.01% 13.13% 11.01% 7.04% 9.17% 9.79% 10.71% 15.78% 15.60% 16.46% 12.47% 12.07%
Net Profit Margin 11.45% 9.61% 8.61% 5.80% 7.52% 6.31% 7.02% 11.14% 11.31% 11.17% 8.99% 9.11%

# SalesExpenses%Sales 60.70% 62.56% 63.61% 63.37% 61.95% 60.59% 60.55% 62.61% 62.29% 60.01% 61.82% 62.12%
Depreciation%Sales 3.66% 4.45% 5.47% 9.19% 8.73% 8.11% 6.86% 5.57% 4.83% 5.15% 6.20% 5.52%
OperatingIncome%Sales 23.92% 20.13% 19.42% 18.04% 19.55% 20.46% 20.69% 23.07% 21.33% 22.41% 20.90% 20.57%

# Return on Capital Employed 15.70% 13.26% 10.32% 7.04% 8.20% 9.16% 10.93% 15.66% 15.99% 15.92% 12.22% 12.10%
Retained Earnings% 86.22% 85.26% 86.47% 80.71% 78.80% 76.60% 73.19% 81.12% 83.61% 73.02% 80.50% 80.91%
Return on Equity% 11.59% 10.09% 10.31% 6.65% 8.01% 6.88% 7.63% 11.65% 11.81% 10.86% 9.55% 10.20%
Self Sustained Growth Rate 10.00% 8.60% 8.91% 5.37% 6.31% 5.27% 5.58% 9.45% 9.87% 7.93% 7.73% 8.27%
Interest Coverage Ratio 12.17x 9.85x 8.35x 7.36x 13.16x 10.51x 10.29x 19.82x 32.92x 35.19x 15.96x 11.34x

# Debtor Turnover Ratio 6.21x 5.68x 5.85x 5.62x 4.89x 3.94x 4.40x 5.56x 6.36x 5.61x 5.41x 5.61x
Creditor Turnover Ratio 4.84x 3.58x 3.18x 3.42x 3.49x 3.69x 3.54x 4.24x 4.39x 4.47x 3.88x 3.64x
Inventory Turnover 3.51x 3.00x 3.62x 4.13x 3.75x 4.13x 3.91x 4.10x 4.07x 4.41x 3.86x 3.99x
Fixed Asset Turnover 1.57x 1.66x 1.47x 1.52x 1.52x 1.70x 1.77x 2.01x 2.25x 2.48x 1.80x 1.68x
Capital Turnover Ratio 1.01x 1.05x 1.20x 1.15x 1.07x 1.09x 1.09x 1.05x 1.04x 0.97x 1.07x 1.06x

# Debtor Days 59 64 62 65 75 93 83 66 57 65 69 65
Payable Days 75 102 115 107 105 99 103 86 83 82 96 100
Inventory Days 104 122 101 88 97 88 93 89 90 83 96 91
Cash Conversion Cycle (in days) 87 84 49 47 67 82 73 69 64 66 69 68

# CFO/Sales 23.92% 20.13% 19.42% 18.04% 19.55% 20.46% 20.69% 23.07% 21.33% 22.41% 20.90% 20.57%
CFO/Total Assets 18.16% 14.58% 12.72% 12.44% 13.07% 14.09% 15.13% 17.79% 17.29% 17.40% 15.27% 14.85%
CFO/Total Debt 72.63% 46.91% 28.09% 31.19% 35.09% 38.26% 46.27% 67.72% 77.18% 86.54% 52.99% 46.59%

Page 4 of 17
 COMMON SIZE STATEMENT
# Common Size Income Statement - CIPLA LTD

Particulars Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23

Sales 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Raw Material Cost 38.72% 39.96% 36.45% 36.17% 37.42% 35.06% 36.40% 39.38% 42.37% 36.69%
Change in Inventory 0.63% 3.03% -0.46% -0.77% 1.54% -0.29% 1.43% 1.01% 3.33% 0.42%
Power and Fuel 2.15% 2.01% 1.78% 1.75% 1.97% 2.05% 1.91% 1.61% 1.52% 1.55%
Other Mfr. Exp 5.29% 6.22% 7.25% 6.34% 6.28% 5.67% 5.94% 5.60% 5.46% 5.29%
Employee Cost 15.17% 17.40% 17.67% 18.35% 17.81% 17.52% 17.72% 17.02% 16.28% 16.89%
Selling and admin 14.10% 14.11% 13.79% 14.94% 15.47% 16.65% 16.85% 12.56% 14.38% 15.34%
Other Expenses 4.10% 4.26% 4.62% 4.34% 3.93% 3.83% 3.89% 2.63% 2.41% 2.56%
Other Income 2.47% 1.45% 1.51% 1.45% 1.85% 2.91% 2.01% 1.39% 0.45% 1.29%
Depreciation 3.66% 4.45% 5.47% 9.19% 8.73% 8.11% 6.86% 5.57% 4.83% 5.15%
Interest 1.43% 1.48% 1.50% 1.11% 0.75% 1.03% 1.15% 0.84% 0.49% 0.48%
Profit before tax 18.48% 14.58% 12.52% 8.49% 11.02% 12.71% 12.71% 17.17% 16.05% 17.75%
Tax 4.55% 3.53% 2.40% 1.25% 1.65% 3.48% 3.68% 4.64% 4.29% 5.29%
Net profit 13.65% 10.41% 9.86% 6.99% 9.31% 9.34% 9.03% 12.55% 11.56% 12.31%
Dividend Amount 1.58% 1.42% 1.17% 1.12% 1.59% 1.48% 1.88% 2.10% 1.85% 3.02%
EBITDA 23.30% 19.87% 19.23% 18.54% 20.44% 21.95% 20.72% 23.60% 21.18% 23.23%

# Common Size Balance Sheet - CIPLA LTD

Particulars Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23

Total Liabilities 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Equity Share Capital 1.20% 1.02% 0.76% 0.77% 0.71% 0.68% 0.69% 0.65% 0.60% 0.55%
Reserves 73.80% 67.90% 53.95% 59.34% 62.05% 62.50% 66.61% 73.08% 77.00% 79.34%
Borrowings 9.31% 10.87% 24.71% 19.71% 18.07% 18.16% 12.02% 8.10% 3.93% 2.74%
Other Liabilities 15.69% 20.20% 20.58% 20.19% 19.17% 18.66% 20.68% 18.16% 18.47% 17.37%

Total Assets 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Net Block 48.48% 43.58% 44.51% 45.48% 43.89% 40.44% 41.34% 38.28% 36.05% 31.26%
Capital Work in Progress 3.30% 3.71% 9.79% 8.06% 4.33% 2.85% 3.52% 3.90% 2.85% 3.73%
Investments 5.29% 4.08% 3.60% 4.66% 5.55% 10.75% 6.28% 10.90% 9.50% 12.50%
Other Assets 42.94% 48.63% 42.10% 41.79% 46.23% 45.97% 48.86% 46.91% 51.60% 52.50%
Receivables 12.23% 12.75% 11.19% 12.28% 13.68% 17.47% 16.61% 13.86% 12.75% 13.85%
Inventory 21.61% 24.13% 18.09% 16.70% 17.84% 16.69% 18.69% 18.79% 19.92% 17.60%
Cash & Bank 1.31% 3.60% 4.14% 2.99% 4.26% 2.60% 4.29% 5.64% 7.18% 5.34%

Page 5 of 17
 FORECASTING
CIPLA LTD - Sales Forecast CIPLA LTD - EBITDA Forecast CIPLA LTD - Earning per share forecast
# Year Weight Year Sales Sales Growth Year Weight Year EBITDA EBITDA Growth Year Weight Year EPS EPS Growth
1 2014A 10,173.4 1 2014A 2,370.2 1 2014A 14.5
2 2015A 11,345.4 11.52% 2 2015A 2,253.8 -4.91% 2 2015A 13.6 -6.48%
3 2016A 13,790.1 21.55% 3 2016A 2,652.4 17.69% 3 2016A 14.8 8.88%
4 2017A 14,394.3 4.38% 4 2017A 2,668.5 0.60% 4 2017A 10.4 -29.83%
5 2018A 15,155.7 5.29% 5 2018A 3,097.7 16.09% 5 2018A 14.2 36.46%
6 2019A 16,362.4 7.96% 6 2019A 3,592.0 15.96% 6 2019A 12.8 -9.39%
7 2020A 17,132.0 4.70% 7 2020A 3,549.7 -1.18% 7 2020A 14.9 16.36%
8 2021A 19,159.6 11.84% 8 2021A 4,522.0 27.39% 8 2021A 26.5 77.47%
9 2022A 21,763.3 13.59% 9 2022A 4,608.9 1.92% 9 2022A 30.5 15.19%
10 2023A 22,753.1 4.55% 10 2023A 5,286.4 14.70% 10 2023A 31.5 3.27%
11 2024E 23,616.6 3.80% 11 2024E 5,300.7 0.27% 11 2024E 29.8 -5.50%
12 2025E 24,964.5 5.71% 12 2025E 5,635.4 6.31% 12 2025E 31.8 6.97%
13 2026E 26,312.5 5.40% 13 2026E 5,970.0 5.94% 13 2026E 33.9 6.51%
14 2027E 27,660.4 5.12% 14 2027E 6,304.7 5.61% 14 2027E 36.0 6.11%
15 2028E 29,008.4 4.87% 15 2028E 6,639.3 5.31% 15 2028E 38.1 5.76%

Sales Growth EBITDA Growth EPS Growth

6.00% 20.00% 10.00%
5.00%
15.00% 5.00%
4.00%
3.00% 10.00%
0.00%
2.00%
5.00% 2023A 2024A 2025A 2026A 2027A 2028A
1.00% -5.00%
0.00% 0.00%
2023A 2024A 2025A 2026A 2027A 2028A 2023A 2024A 2025A 2026A 2027A 2028A -10.00%

Page 6 of 17
 WACC
# Weighted Average Cost of Capital

All figures are in INR unless stated otherwise.

Peer Comps
Debt/ Debt/ Levered Unlevered
Name Country Total Debt Total Equity Tax Rate 1 Equity Capital Beta 2 Beta 3

Cipla India 960.9 1,19,543.6 30.00% 0.80% 0.80% 0.49785 0.49507

Sun Pharma.Inds. India 1,928.2 3,74,494.7 30.00% 0.51% 0.51% 0.42000 0.41849
Dr Reddy's Labs India 1,323.0 1,04,617.0 30.00% 1.26% 1.25% 0.44000 0.43614
Zydus Lifesci. India 191.9 1,00,476.0 30.00% 0.19% 0.19% 0.36000 0.35952
Mankind Pharma India 9.7 85,301.8 30.00% 0.01% 0.01% 0.21000 0.20998

Average 30.00% 0.56% 0.55% 0.39 0.38

Median 30.00% 0.51% 0.51% 0.42 0.42

Capital Structure Levered Beta

Current Target Comps Median Unlevered Beta 0.42

Total Debt 960.9 0.80% 0.55% Target Debt/ Equity 0.56%
Market Capitalization 1,19,543.6 99.20% 99.45% Tax Rate 30.00%
Total Capitalization 120504.53 100.00% 100.00% Levered Beta 0.54

Debt / Equity 0.80% 0.56%

Cost of Debt Cost of Equity

Pre-tax Cost of Debt 11.10% Risk Free Rate 7.05%

Tax Rate 30.00% Equity Risk Premium 9.79%
After Tax Cost of Debt 7.77% Levered Beta 4 0.54
Cost of Equity 12.37%

1. Tax Rate considered as Marginal Tax Rate for the country Weighted Average Cost of Capital
2. Levered Beta is based on 5 year monthly data
3. Unlevered Beta = Levered Beta/(1+(1-Tax Rate) x Debt/Equity) Total Cost Weight
3. Levered Beta = Unlevered Beta/(1+(1-Tax Rate) x Debt/Equity) Debt Capital 7.77% 0.55%
Equity Capital 12.37% 99.45%
WACC 12.34%

Page 7 of 17
 Intrinsic Growth Rate
# Calculation of ROIC Mar-19 Mar-20 Mar-21 Mar-22 Mar-23

Current Assets
Inventories 3,965.0 4,378.0 4,669.0 5,350.0 5,156.0
Trade receivables 4,151.0 3,891.0 3,446.0 3,424.0 4,057.0
Short term Loans(Loans/Advances) 9.0 8.0 1.0 13.0 8.0
Other asset items 2,180.0 2,164.0 2,144.0 3,141.0 4,598.0
Total Current Assets 10,305.0 10,441.0 10,260.0 11,928.0 13,819.0

Current Liabilities
Trade Payables 1,948.0 2,282.0 2,067.0 2,508.0 2,457.0
Advance from Customers 44.0 34.0 40.0 74.0 63.0
Other liability items 2,109.0 2,233.0 2,149.0 2,102.0 2,264.0
Total Current Liabilities 4,101.0 4,549.0 4,256.0 4,684.0 4,784.0

# Net Working Capital 6,204.0 5,892.0 6,004.0 7,244.0 9,035.0

Non Current Assets

Land 115.0 161.0 194.0 219.0 251.0
Building 2,547.0 2,866.0 2,805.0 3,051.0 3,116.0
Plant Machinery 4,585.0 4,916.0 5,291.0 5,811.0 5,931.0
Equipments 98.0 103.0 92.0 99.0 109.0
Furniture n fittings 150.0 156.0 147.0 156.0 159.0
Vehicles 11.0 13.0 12.0 14.0 10.0
Intangible Assets 3,427.0 3,566.0 3,779.0 3,951.0 3,825.0
Other fixed assets 2,925.0 3,336.0 3,458.0 3,666.0 3,721.0
Gross Block 13,858.0 15,117.0 15,778.0 16,967.0 17,122.0
Accumulated Depreciation (4,250.0) (5,468.0) (6,271.0) (7,285.0) (7,962.0)
Net Non Current Assets 9,608.0 9,649.0 9,507.0 9,682.0 9,160.0

# Invested Capital 15,812.0 15,541.0 15,511.0 16,926.0 18,195.0

EBIT 1,771.0 2,031.3 3,184.8 3,500.8 3,854.9

# ROIC 11.20% 13.07% 20.53% 20.68% 21.19%

# Calculation of Reinvestment Rate Mar-19 Mar-20 Mar-21 Mar-22 Mar-23

Net Capex 504.0 986.0 791.0 681.0 1,136.0

Change in Working Capital (312.0) 112.0 1,240.0 1,791.0

EBIT 1,771.0 2,031.3 3,184.8 3,500.8 3,854.9

Marginal Tax Rate 25.00% 25.00% 25.00% 25.00% 25.00%
EBIT(1-T) 1,328.3 1,523.5 2,388.6 2,625.6 2,891.1

Reinvestment 674.0 903.0 1,921.0 2,927.0

Reinvestment Rate 44.24% 37.80% 73.16% 101.24%

4 Year Average 64.11%

4 Year Median 58.70%

# Calculation of Growth Rate Mar-19 Mar-20 Mar-21 Mar-22 Mar-23

Reinvestment Rate 44.24% 37.80% 73.16% 101.24%

ROIC 13.07% 20.53% 20.68% 21.19%
Intrinsic Growth 5.78% 7.76% 15.13% 21.45%

4 Year Average 12.53%

4 Year Median 11.45%

Page 8 of 17
 DCF VALUATION
# Calculation of PV of FCFF Mar-23A Mar-24F Mar-25F Mar-26F Mar-27F Mar-28F

EBIT 1,771.00 1,992.93 2,242.68 2,523.73 2,839.99 3,195.89

Tax Rate 25.00% 25.00% 25.00% 25.00% 25.00% 25.00%
EBIT(1-T) 1,328.25 1,494.70 1,682.01 1,892.79 2,129.99 2,396.91
Less: Reinvestment Rate 58.70% 58.70% 58.70% 58.70% 58.70% 58.70%
Free Cash Flow to Firm (FCFF) 548.54 617.29 694.66 781.72 879.69 989.93
Mid Year Convention 0.5 1.5 2.5 3.5 4.5
Discounting Factor 0.943 0.840 0.748 0.665 0.592
PV of FCFF 582.4 583.4 584.4 585.3 586.3

Expected Growth 12.53%

Terminal Growth 4.00%
WACC 12.34%

# Calculation of Terminal Value

FCFF (n+1) 1,113.98

WACC 12.34%
Terminal Growth Rate 4.00%

Terminal Value 13,351.50

# Calculation of Equity Value per Share

PV of FCFF 2,921.79
PV of Terminal Value 7,907.97
Value of Operating Assets(EV) 10,829.76

Add: Cash 1,564.62

Less: Debt 520.00
Value of Equity 11,874.38
No of Shares 80.72
Equity Value per Share 147.11

Share price 1,496

Discount/Premium 10.17x

Page 9 of 17
 BETA REGRESSION ANALYSIS
# CIPLA LTD - Returns NIFTY Returns Beta Drifting Beta 3
0.4979
Date Closing Price Return Closing Price Return Levered Raw Beta 0.4979
16-03-2015 671.4 8,570.9 Raw Beta Weight 75.00%
23-03-2015 665.8 -0.83% 8,341.4 -2.68%
30-03-2015 680.8 2.25% 8,586.3 2.94% Market Beta 1.00
06-04-2015 672.7 -1.19% 8,780.3 2.26% Market Beta Weight 25.00%
13-04-2015 652.8 -2.96% 8,606.0 -1.99%
20-04-2015 611.8 -6.28% 8,305.3 -3.49% Adjusted Beta 0.62
27-04-2015 610.2 -0.26% 8,181.5 -1.49%
04-05-2015 628.1 2.94% 8,191.5 0.12%
11-05-2015 655.6 4.38% 8,262.3 0.86% SUMMARY OUTPUT
18-05-2015 646.5 -1.38% 8,459.0 2.38%
25-05-2015 624.0 -3.48% 8,433.7 -0.30% Regression Statistics
01-06-2015 597.4 -4.27% 8,114.7 -3.78% Multiple R 0.312203353
08-06-2015 558.0 -6.58% 7,982.9 -1.62% R Square 0.097470934
15-06-2015 582.0 4.30% 8,225.0 3.03% Adjusted R Square 0.095538323
22-06-2015 594.2 2.09% 8,381.1 1.90% Standard Error 0.033936179
29-06-2015 605.9 1.98% 8,484.9 1.24% Observations 469
06-07-2015 621.7 2.60% 8,360.5 -1.47%
13-07-2015 657.4 5.74% 8,609.8 2.98% ANOVA
20-07-2015 650.6 -1.04% 8,521.5 -1.03% df SS MS F Significance F
27-07-2015 680.3 4.56% 8,532.8 0.13% Regression 1 0.058084 0.058084025 50.43485894 4.61968E-12
03-08-2015 686.1 0.86% 8,564.6 0.37% Residual 467 0.537827 0.001151664
10-08-2015 709.6 3.42% 8,518.5 -0.54% Total 468 0.595911
17-08-2015 671.0 -5.44% 8,300.0 -2.57%
24-08-2015 634.8 -5.38% 8,002.0 -3.59% CoefficientsStandard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%
31-08-2015 624.9 -1.56% 7,655.0 -4.34% Intercept 0.001167625 0.001575 0.741334358 0.458863355 -0.0019274 0.00426265 -0.0019274 0.00426265
07-09-2015 628.4 0.55% 7,789.3 1.75% X Variable 1 0.49785405 0.070103 7.101750414 4.61968E-12 0.360097664 0.63561044 0.360097664 0.63561044
14-09-2015 627.3 -0.18% 7,981.9 2.47%
21-09-2015 618.7 -1.37% 7,868.5 -1.42%
28-09-2015 609.5 -1.48% 7,950.9 1.05%
05-10-2015 663.4 8.84% 8,189.7 3.00%
12-10-2015 653.7 -1.46% 8,238.2 0.59%
19-10-2015 656.3 0.40% 8,295.5 0.70%
26-10-2015 664.3 1.21% 8,065.8 -2.77%
02-11-2015 633.2 -4.68% 7,954.3 -1.38%
09-11-2015 594.5 -6.12% 7,762.3 -2.41%
16-11-2015 622.3 4.69% 7,856.5 1.21%
23-11-2015 619.2 -0.49% 7,942.7 1.10%
30-11-2015 621.3 0.33% 7,781.9 -2.02%
07-12-2015 615.0 -1.01% 7,610.5 -2.20%
14-12-2015 617.8 0.45% 7,762.0 1.99%
21-12-2015 623.6 0.95% 7,861.0 1.28%

Page 10 of 17
 MARKET RETURNS

# Return on Markets

Year Annual
2000 -14.65% Average Return 15.61%
2001 -16.18% Dividend Yield 1.23%
2002 3.25% Total Market Returns 16.84%
2003 71.90%
2004 10.68%
2005 36.34%
2006 39.83%
2007 54.77%
2008 -51.79%
2009 75.76%
2010 17.95%
2011 -24.62%
2012 27.70%
2013 6.76%
2014 31.39%
2015 -4.06%
2016 3.01%
2017 28.65%
2018 3.15%
2019 12.02%
2020 14.90%
2021 24.12%
2022 4.32%
2023 19.42%

Page 11 of 17
 RELATIVE VALUATION
Amount in crores
Comparable Company Valuation
Market Data Financials Valuation
Share Shares Enterprise
# Company Ticker Price Outstanding Equity Value Net Debt Value Revenue EBITDA Net Income EV/Revenue EV/EBITDA P/E
Cipla 1,496 80.74 1,20,787 961 1,19,819 25,350 6,735 3,483 4.7x 17.8x 34.7x
Sun Pharma.Inds. 1,570 239.93 3,76,738 1,928 3,73,633 47,445 13,989 8,554 7.9x 26.7x 44.0x
Dr Reddy's Labs 6,295 16.68 1,04,994 1,323 1,03,898 27,213 8,523 5,091 3.8x 12.2x 20.6x
Zydus Lifesci. 995 101.22 1,00,744 192 99,829 19,024 5,164 2,926 5.2x 19.3x 34.4x
Mankind Pharma 2,122 40.06 85,011 10 84,882 8,984 2,378 1,412 9.4x 35.7x 60.2x
Lupin 1,650 45.56 75,160 3,785 77,847 19,480 3,542 1,349 4.0x 22.0x 55.7x
Alkem Lab 4,985 11.96 59,625 1,441 58,488 12,634 2,519 1,430 4.6x 23.2x 41.7x
Aurobindo Pharma 1,011 58.59 59,252 6,649 61,711 27,895 5,991 2,319 2.2x 10.3x 25.6x
Biocon 267 120.06 32,104 18,252 48,609 14,613 4,253 715 3.3x 11.4x 44.9x
Ipca Labs. 1,183 25.37 30,018 1,987 31,365 7,184 1,277 488 4.4x 24.6x 61.5x
High 9.4x 35.7x 61.5x
75th Percentile 5.1x 24.2x 53.0x
Average 5.0x 20.3x 42.3x
Median 4.5x 20.7x 42.9x
25th Percentile 3.9x 13.6x 34.5x
Low 2.2x 10.3x 20.6x

# Cipla Comparable Valuation EV/Revenue EV/EBITDA P/E

Implied Enterprise Value 1,14,017 1,39,116 1,50,243
Net Debt 961 961 961
Implied Market Value 1,14,984 1,40,083 1,49,282
Shares Outstanding 80.74 80.74 80.74
Implied Value per Share 1,424.1 1,735.0 1,848.9

Overvalued Undervalued Undervalued

Page 12 of 17
 FOOTBALL FIELD
ANALYSIS
# Sensitivity Analysis
147.11 8% 10% 12.34% 14%
2% 185.4 151.3 128.2 117.3
3% 212.6 165.9 136.7 123.4
4% 253.5 185.4 147.1 130.9
5% 321.6 212.6 160.5 140.0

# Football Field Analysis - Data

OpenLow Low OpenHigh High
Comps 1424 1424 1848 1848
DCF Bear 117 117 140 140
DCF Base 128 128 160 160
DCF Bull 185 185 321 321
52W H/L 852 852 1519 1519

Football Field Analysis - Valuation Summary (Rs)

2,000.00 ₹ 1,848.00
1,800.00
₹ 1,519.00
1,600.00
1,400.00
₹ 1,424.00
1,200.00
1,000.00
800.00
₹ 852.00
600.00
₹ 321.00
400.00
₹ 140.00 ₹ 160.00
200.00
0.00 ₹ 185.00
₹ 117.00 ₹ 128.00
Comps DCF Bear DCF Base DCF Bull 52W H/L

Page 13 of 17
 VALUE AT RISK
# Date Adj Close Return Sorted Returns Replication Simulated Returns Calculation of Value at Risk - CIPLA LTD(Simulation)
27-11-2003 84.12 -0.109106242 12.24173597 1 -0.503558883
27-04-2004 94.42 0.043515268 11.90790221 2 -0.066145352 Historical Approach
26-12-2003 90.48 0.762249094 11.70266195 3 -0.358641265 Mean 0.75%
15-04-2003 51.34 -0.885306577 11.54325076 4 -0.125283416 Std Deviation 28.69%
11-05-2004 447.66 14.58071837 3.861168868 5 -0.03878426 Min -0.92%
01-03-1999 28.73 -0.949506062 0.151863616 6 0.077608723 Max 12.24%
09-04-2020 569.02 2.231362489 0.130375489 7 -0.077918975 CMP 1496.0
02-02-2006 176.09 1.652884022 0.10758278 8 0.228297248
04-07-2000 66.38 2.631619797 0.103594013 9 -0.351263587 Monte Carlo Simulation
15-04-1998 18.28 -0.742012572 0.100040228 10 -0.407839433 Mean -1.10%
29-08-2003 70.85 2.763011099 0.099895929 11 0.506078566 Std Deviation 28.66%
04-05-1998 18.83 -0.983928216 0.099795927 12 0.0874549 Min -1.05%
27-07-2023 1171.45 1.424042294 0.096349978 13 0.06355437 Max 1.01%
07-04-2020 483.26 4.80916994 0.095837046 14 0.288727591 CMP 1496.0
18-05-2004 83.19 -0.89349331 0.093995524 15 -0.357414914
10-08-2020 781.07 2.357850839 0.091882294 16 0.113280306 Percentile Confidence VAR % Stock Price VAR (INR)
18-05-2009 232.61 2.054947623 0.090948603 17 0.01847895 5.0% 95.0% -45.29% 818.5 677.5
20-04-2001 76.14 0.117421351 0.089605568 18 -0.22830635 1.0% 99.0% -65.66% 513.7 982.3
28-12-2000 68.14 -0.845484208 0.089533021 19 0.230879641 0.5% 99.5% -72.09% 417.5 1078.5
03-04-2020 441.00 3.195887695 0.085679855 20 0.355853854 10% 90.0% -35.41% 966.3 529.7
09-03-2005 105.10 5.802305101 0.084419039 21 -0.212558106
25-03-1998 15.45 -0.732331485 0.084242065 22 0.156514878
04-05-2000 57.72 3.316777136 0.083950931 23 -0.334490295
03-03-1997 13.37 -0.422686228 0.082093609 24 -0.150182696
27-01-1999 23.16 -0.65159676 0.080042255 25 -0.205295193
10-03-2000 66.48 -0.142699877 0.080042178 26 -0.253077016
14-03-2000 77.55 1.272751806 0.08003238 27 -0.385938233
25-03-1999 34.12 -0.524790882 0.080032096 28 -0.289590892
13-03-2000 71.80 1.034566893 0.080016369 29 0.143990388
16-04-1999 35.29 -0.439983056 0.080013747 30 -0.171018002
18-08-1999 63.02 0.080012715 0.080012715 31 -0.289167446
17-08-1999 58.35 -0.362438204 0.080010054 32 0.239580122
22-09-1999 91.52 0.113664229 0.080009413 33 0.403552361
12-01-2000 82.18 1.010979686 0.080009164 34 -0.117837331
19-07-1999 40.86 -0.581878937 0.080007185 35 -0.068349477

Page 14 of 17
 DUPONT ANALYSIS

CIPLA LTD
(CIPLA | BSE Code: 500087)
INR 1496
52 Week (High - INR 1519 & Low - 852)

About the company

Cipla Limited (stylized as Cipla) is an Indian multinational pharmaceutical company headquartered in Mumbai.
Cipla primarily focuses on developing medication to treat respiratory disease, cardiovascular disease, arthritis,
diabetes, depression, and various other medical conditions. Cipla has 47 manufacturing locations across the
world and sells its products in 86 countries. Cipla sells active pharmaceutical ingredients to other
manufacturers as well as pharmaceutical and personal care products

Financial Summary
Revenues (INR Crs.) Net Profit (INR Crs.) Average Total Assets (INR Crs.)

21,763 22,753
2,461 2,542 28,079
19,160
17,132 2,135
25,856

1,203 24,139
23,592

2020 2021 2022 2023 2020 2021 2022 2023 2020 2021 2022 2023

Return on Equity (%) Return on Asset (%) Financial Leverage

9.52% 9.05%
12.53% 12.56% 8.85%
11.49% 1.53x
1.42x
1.32x 1.27x
7.82% 5.10%

2020 2021 2022 2023 2020 2021 2022 2023 2020 2021 2022 2023

Recent Updates
• Cipla logs decent Q4; product launch delays, regulatory risks near-term overhang.
• Cipla Q4 Results: Prot jumps 45% YoY to Rs 526 crore, revenue rises 9%.
• The total revenue from operations was Rs 5,260.33 crore, up 14.19 per cent from Rs 4,606.45 crore
the company reported in the year-ago quarter.
• In Q4, North America delivered strong growth of 41 per cent YoY and 38 per cent QoQ.
• The company’s consolidated revenues for the quarter rose 5.2 per cent on-year to Rs. 4,606.45
crore, which was also sharply below Street’s estimate.
• Phillip Capital expects 8.1 per cent YoY growth in net prot of Cipla.
• Total income of the company stood at Rs 3,737.9 crore, up 3.69 percent YoY.
• Cipla Limited, India's second-biggest drugmaker by market capitalisation, posted a fourth-quarter
profit on Tuesday, but missed analysts' estimates. Net profit came in at 1.79 billion rupees for the
quarter ended March 31, compared with a loss of 617.9 million rupees in the year-ago quarter.

Page 15 of 17
 DUPONT ANALYSIS

Dupont Analysis - Return on Equity & Return on Asset

Return on Equity (ROE)
Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Net Profit 834.2 1,139.2 1,033.0 1,202.8 2,135.3 2,460.7 2,542.5
Average Shareholder Equity 12,029.9 13,386.4 14,620.7 15,387.6 17,044.8 19,584.1 22,124.7
Return on Equity 6.93% 8.51% 7.07% 7.82% 12.53% 12.56% 11.49%

ROE - Dupont Equation

Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Net Profit 834.2 1,139.2 1,033.0 1,202.8 2,135.3 2,460.7 2,542.5
Revenue 14,394.3 15,155.7 16,362.4 17,132.0 19,159.6 21,763.3 22,753.1
Net Profit Margin (A) 5.80% 7.52% 6.31% 7.02% 11.14% 11.31% 11.17%

Revenue 14,394.3 15,155.7 16,362.4 17,132.0 19,159.6 21,763.3 22,753.1

Average Total Asset 20,959.2 21,770.9 23,217.4 23,592.4 24,139.0 25,856.2 28,078.6
Asset Turnover Ratio (B) 0.687x 0.696x 0.705x 0.726x 0.794x 0.842x 0.810x

Average Total Asset 20,959.2 21,770.9 23,217.4 23,592.4 24,139.0 25,856.2 28,078.6
Average Shareholder Equity 12,029.9 13,386.4 14,620.7 15,387.6 17,044.8 19,584.1 22,124.7
Equity Multiplier (C) 1.74x 1.63x 1.59x 1.53x 1.42x 1.32x 1.27x

Return on Equity (A*B*C) 6.93% 8.51% 7.07% 7.82% 12.53% 12.56% 11.49%

Return on Asset
Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Net Profit 834.2 1,139.2 1,033.0 1,202.8 2,135.3 2,460.7 2,542.5
Average Total Asset 20,959.2 21,770.9 23,217.4 23,592.4 24,139.0 25,856.2 28,078.6
Return on Asset 3.98% 5.23% 4.45% 5.10% 8.85% 9.52% 9.05%

ROA - Dupont Equation

Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Net Profit 834.2 1,139.2 1,033.0 1,202.8 2,135.3 2,460.7 2,542.5
Revenue 14,394.3 15,155.7 16,362.4 17,132.0 19,159.6 21,763.3 22,753.1
Net Profit Margin (A) 5.80% 7.52% 6.31% 7.02% 11.14% 11.31% 11.17%

Revenue 14,394.3 15,155.7 16,362.4 17,132.0 19,159.6 21,763.3 22,753.1

Average Total Asset 20,959.2 21,770.9 23,217.4 23,592.4 24,139.0 25,856.2 28,078.6
Asset Turnover Ratio (B) 0.7x 0.7x 0.7x 0.7x 0.8x 0.8x 0.8x

Return on Asset (A*B) 3.98% 5.23% 4.45% 5.10% 8.85% 9.52% 9.05%

Dupont Summary
• ROE of Cipla Ltd spiked during covid, given the increase in demand for pharmaceutical products during the
year 2020. However, the ROE has shown poor growth rate during the last three years hovering at a constant
of 12%.
• The company has maintained a constant financial leverage due to slow rise in total assets and the reducing
effect of debt during the years 2020-2023. Another reason for the lagging ROE is the company's failure to
address slow growth rates in net profit margin and asset turnover ratio. The net profit spiked to 11% from 7%
during the COVID and has since lost its momentum.
• ROA of Cipla Ltd jumped from 5% in 2020 to 8.85% in 2021 owing to the increase in net profit margins during
the same period. However, given a constant net profit margin and asset turnover ratio for the period 2021-
2023 , the ROA growth has subsequently lacked.
Disclaimer : This report is made as part of educational assignment and is meant for educational purpose only. The author of the report is not liable for
any losses due to actions taken basis this report. It is advisable to consult SEBI registered reasearch analyst before making any investments

Page 16 of 17
 ALTMAN Z SCORE
CIPLA LTD
(CIPLA | BSE Code: 500087)
INR 1496
52 Week (High - INR 1519 & Low - 852)

Altman's Z Score Analysis

Cipla Limited (stylized as Cipla) is an Indian multinational pharmaceutical company headquartered in Mumbai. Cipla
primarily focuses on developing medication to treat respiratory disease, cardiovascular disease, arthritis, diabetes,
depression, and various other medical conditions. Cipla has 47 manufacturing locations across the world and sells its
products in 86 countries. Cipla sells active pharmaceutical ingredients to other manufacturers as well as pharmaceutical
and personal care products

Altman's Z Score Analysis Calculation

Working Capital / Total Assets
Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Working Capital 4,508.4 6,136.9 6,489.8 6,601.0 7,146.5 8,897.4 10,294.7
Total Assets 20,868.9 22,672.9 23,761.9 23,422.8 24,855.3 26,857.2 29,300.0
Working Capital / Total Assets (A) 21.60% 27.07% 27.31% 28.18% 28.75% 33.13% 35.14%

Retained Earnings / Total Assets

Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Retained Earnings 673.3 897.7 791.3 880.3 1,732.1 2,057.3 1,856.4
Total Assets 20,868.9 22,672.9 23,761.9 23,422.8 24,855.3 26,857.2 29,300.0
Retained Earnings / Total Assets (B) 3.23% 3.96% 3.33% 3.76% 6.97% 7.66% 6.34%

EBIT / Total Assets

EBIT 1,173.4 1,503.6 1,771.0 2,031.3 3,184.8 3,500.8 3,854.9
Total Assets 20,868.9 22,672.9 23,761.9 23,422.8 24,855.3 26,857.2 29,300.0
EBIT/Total Assets (C) 5.62% 6.63% 7.45% 8.67% 12.81% 13.03% 13.16%

Market Cap / Long term Liabilities

Market Cap 47,702.8 43,914.2 42,613.5 34,090.2 65,737.8 82,136.3 72,688.4
Long term Liabilities 3,645.0 3,662.0 3,830.0 2,369.0 1,203.0 416.0 0.0
Market Cap / Long term Liabilities (D) 13.09% 11.99% 11.13% 14.39% 54.64% 197.44% 0.00%

Sales / Total Assets

Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Total Sales 14,394.3 15,155.7 16,362.4 17,132.0 19,159.6 21,763.3 22,753.1
Total Assets 20,868.9 22,672.9 23,761.9 23,422.8 24,855.3 26,857.2 29,300.0
Return on Asset (E) 68.97% 66.85% 68.86% 73.14% 77.08% 81.03% 77.66%

Altman's Z Score

Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23

Final Score 0.5 0.6 0.7 0.7 1.1 1.9 0.9
Financial Stability Distressed Distressed Distressed Distressed Distressed Grey Zone Distressed
Disclaimer : This report is made as part of educational assignment and is meant for educational purpose only. The author of the report is not liable for any losses due to
actions taken basis this report. It is advisable to consult SEBI registered reasearch analyst before making any investments

Page 17 of 17