Cipla Vs Dr. Reddy’s Laboratories: India is called the “Pharmacy of the World”. It is the world’s largest supplier of generic medicine, in terms of volume with a 20% market share. According to the Economic Survey 2023, India’s domestic pharmaceutical market was estimated at $41 billion. 

The roots of India’s pharmaceutical capabilities lay deep within its rich history. This industry is a prime example of the country’s commitment to affordable healthcare. Indian Pharma has transformed greatly setting new benchmarks in Manufacturing, drug discovery, and distribution.

Cipla Vs Dr. Reddy’s Laboratories

In this article on Cipla Vs Dr. Reddy’s Laboratories, we compare their scale of operations, segments, financials, future plans and more…

Today, we will fundamentally analyze two such Companies that form part of the Top 5 largest Pharmaceutical Companies in India. We will understand which drug market they cater to, and what opportunities lay ahead for them. Then we will finally draw a proper comparison between the two before concluding the article.

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Company Overview – Cipla

Cipla was established in 1935 by Khwaja Abdul Hamied as a “Chemical, Industrial & Pharmaceutical Laboratories” in Mumbai. Today, it is a global pharmaceutical company leading in generic drugs, curing respiratory, urology, cardiology, anti-infective, and other key issues.

It is the 3rd largest pharmaceutical company in India as well as the private pharmaceutical market of South Africa. It is also the second largest Indian exporter to emerging markets and among the most dispensed generic players in the US.

The Company has about 47 manufacturing sites around the world producing 50+ dosage forms and 1,500+ generic products to cater to 85 markets across the globe. It has a strong presence in the home markets of India, South Africa, North America, and other key regulated and emerging markets.

The Company is now entering into the direct-to-consumer (D2C) space with the launch of marquee brands like Rivela Dermascience, MamaXpert, and EveXpert. It also acquired Endura Mass, a renowned nutritional supplement brand in the weight gain category.

In FY23, Cipla set aside 5.9% of its consolidated revenue as CAPEX for Research and development, a 20% increase from the previous year. However, the Company has reduced R&D spending as a % of revenue, which stood at a high of 8% in FY17.

Business Segments 

As of FY23, India is the biggest market for Cipla, contributing to 44% of its revenue. This was followed by North America (USA), which brought in 26% of the revenue, also being FY23’s fastest-growing market, with an expansion of 34% from FY22. The South African & Sub-Saharan Market becomes Cipla’s 3rd important market, bringing in 14% revenue.

Following global demand, Cipla has deepened its portfolio for the US markets with continued traction in the respiratory franchise and expansion of its peptide portfolio with increased market share in the Company’s first Lanreotide injection. This portfolio is boosted by the successful launch of gRevlimid. 

In India, the Company continues to offer a healthy diversified portfolio of branded prescription business, trade generics, and consumer wellness by focusing on growing organically in its core strengths while parallelly investing in opportunities to fortify its position. 

Company Analysis – Dr. Reddy’s Labs

Dr.Reddy’s Laboratories was founded by Scientist, Dr. Kallam Anji Reddy. The Company was established by acquiring Cheminor Drugs an existing bulk drug manufacturing company in 1984.

Today, Dr. Reddy’s Laboratories Ltd. is a global pharmaceutical Company, with its presence spread across the USA, India, Europe, and all emerging markets across the globe. The Company offers a portfolio of products and services including APIs, generics, branded generics, and biosimilars. 

It’s majorly into therapeutic areas of gastrointestinal, cardiovascular, diabetology, oncology, pain management, and dermatology. Dr. Reddy’s has set up 8 R&D facilities, run by 3,087 scientists. The Company has R&D spending of Rs. 1,938Cr, constituting about 7.9% of its revenue.

Its wholly-owned subsidiary Aurigene Oncology Limited (AOL) focuses on the drug discovery business. In recent years, Dr. Reddy has ventured into the digital healthcare business through its wholly-owned subsidiary Svaas Wellness Limited (Svaas).

Business Segments 

The North American Generics Market crossed the billion-dollar revenue mark for the second consecutive year. It continues to hold its position as the largest generics market for Dr. Reddy. It contributed to 48% of Dr. Reddy’s generic revenue and 41% of its entire consolidated revenue.

India ranks as the 2nd most important market for Dr. Reddy, bringing in 20% of total sales. The market grew by 17% from Rs. 4195Cr in FY22 to Rs. 4893Cr in FY23. During the year, the Company launched nine brands in India, including Cidmus and PrimcyV. 

Emerging Markets comprising countries like Russia, Romania, Commonwealth of Independent States (CIS) ranked 3rd recording revenues worth 4553Cr, about 19% of total sales. The market remained stale showing no growth as well as de-growth.

Pharma Services & other Active Ingredients (PSAI) brought in 2907Cr in revenue. The segment saw a de-growth of 5%, from Rs. 3074Cr in FY22. This was primarily due to lower sales of COVID-19-related products. 

PSAI primarily consists of manufacturing and marketing Active Pharmaceutical Ingredients (APIs). These APIs are used to manufacture tablets, capsules, or syrup, using additional inactive ingredients. 

Industry Overview 

In the last few years, the pharma sector has been growing smoothing despite the uncertainties caused by COVID-19. With advances in research, the outlook for the sector is getting clearer with more predictable challenges ahead. 

As per IQVIA report, the global medicine market is expected to reach USD 1.9 trillion by 2027, growing at a CAGR of 3-6% over 2023-2027. Biotechnology will play a huge role in the future, while oncology and immunology will lead the growth chart through 2027. 

The highest growth over the next five years is expected in the Asia-Pacific region, Latin America, India, Africa, and the Middle East, largely driven by population growth. 

Oncology will lead spends in the therapy area. It is forecasted to grow at higher than earlier predicted rates, with an estimated growth of 13% to 16% CAGR. 

Cipla Vs Dr. Reddy’s – Financials

Cipla grew its revenues by 5%, from Rs. 21,763 Cr. in FY22 to Rs. 22,753 Cr in FY23. Dr. Reddy Labs on the other hand was able to report double-digit revenue growth of 17%, increasing revenue from Rs. 22,030Cr in FY22 to Rs. 25,725Cr in FY23.

Cipla saw its profits rise by 11%, growing from Rs. 2517Cr in FY22 to Rs. 2802Cr in FY23. On the other hand, Dr. Reddy was able to double its profits from last year, growing by 107% from Rs. 2182Cr in FY22 to Rs. 4507Cr in FY23.

Upon comparing Revenue & Profit figures Dr. Reddy’s significantly outperforms Cipla. On a 5 5-year term period, Cipla is able to maintain a Revenue growth of 9% CAGR while Dr. Reddy maintains 13% CAGR. Profitability of Cipla & Dr. Reddy’s grew by 16% and 23% on a 5 Year CAGR.

Particulars / Fiscal Year201920202021202220235 Year CAGR
Cipla - Revenue ₹16,362.00 ₹17,132.00 ₹19,160.00 ₹21,763.00 ₹22,753.00 9%
YoY Growth (%)5%12%14%5%
Dr. Reddy's - Revenue₹15,785.70 ₹18,137.60 ₹19,338.90 ₹22,029.60 ₹25,725.20 13%
YoY Growth (%)15%7%14%17%
Cipla - Net Profit₹1,528.00 ₹1,547.00 ₹2,405.00 ₹2,517.00 ₹2,802.00 16%
YoY Growth (%)1%55%5%11%
Dr. Reddy's - Net Profit₹1,950.00 ₹2,026.00 ₹1,951.60 ₹2,182.50 ₹4,507.30 23%
YoY Growth (%)4%-4%12%107%

Profit Margins

Operating Margins of Cipla and Dr. Reddy’s came around 21.93% and 23.2% with Dr. Reddy taking a marginal lead. However, upon taking a 5 Year average figure Dr. Reddy’s margins come around 14.5%, way lower than Cipla’s 20.47%.

Net Profit Margins of Cipla and Dr. Reddy’s stood at 12.3% and 18.3% respectively. The 5 Year average figures of both these Companies switch with Dr. Reddy taking the lead at 12.36%, while Ciplla falls around 10.96%.

Particulars / Fiscal Year201920202021202220235 Year Avg
Cipla - Operating Margins18.93%18.57%22.18%20.73%21.93%20.47%
Dr. Reddy's - Operating Margins13.60%9.20%12.80%13.70%23.20%14.50%
Cipla - Net Profit Margins9.30%9.00%12.60%11.60%12.30%10.96%
Dr. Reddy's - Net Profit Margins12.20%11.20%9.10%11.00%18.3%12.36%

Return Ratios

Cipla reported a Return on Equity of 12.7%, slightly higher than its 5-year average of 12.04%. Dr. Reddy reported RoE of 21.36%, significantly higher than its 5 Year average of 14.72%. Dr. Reddy takes a clear lead in terms of Return on Equity.

Talking about Return on Capital Employed, Cipla and Dr. Reddy reported figures of 18.19% and 34.6% respectively. Both companies beat it 5-year average of 15.55% and 19.78%, and Dr. Reddy maintains its lead.

Particulars / Fiscal Year201920202021202220235 Year Avg
Cipla - RoE10.40%10.10%14.10%12.90%12.70%12.04%
Dr. Reddy's - RoE14.75%13.76%11.82%11.93%21.36%14.72%
Cipla - RoCE11.94%12.53%17.85%17.24%18.19%15.55%
Dr. Reddy's - RoCE14.70%12.20%17.80%19.60%34.60%19.78%

Debt Analysis

Both Companies remain virtually debt-free, with low debt figures of 0.02x and 0.06x for Cipla and Dr. Reddy’s respectively. Both Companies follow a very similar trend when it comes to managing debt levels.

Interest Coverage Ratio (ICR) of both these Companies remains in the safe zone of 46x and 40x for Cipla and Dr. Reddy’s respectively. The recent increase in margins have let them to report ICR figures in the 40x range.

Particulars / Fiscal Year201920202021202220235 Year Avg
Cipla - Debt to Equity0.
Dr. Reddy's - Debt to Equity
Cipla - Interest Coverage18.816.426.84345.930.18
Dr. Reddy's - Interest Coverage18.316.825.531.540.3026.48

Future Plans  


  • Cipla is looking to shift focus towards biosimilars, mRNAs, and (CAR)-T cell therapy. It, recently partnered with Ethris for mRNA-based therapies and has created a strong pipeline of in-licensed biosimilars that will further advance its portfolio.
  • To further strengthen its position in the biosimilars market, Cipla has entered into a joint venture with Kemwell Biopharma (Aspergen Inc). They have two active projects under development, with several others under the evaluation stage.
  • The Company is also looking to expand its presence in India’s semi-urban and rural areas. Hence, it increased its stake in GoApptiv, a digital-tech company. GoApptiv offers comprehensive digital solutions, including marketing and distribution, patient support, and healthcare data analytics that benefit healthcare companies. 
  • In its pursuit of creating depth in anti-diabetics, the Company signed a perpetual license agreement with Novartis for Vildagliptin and its combination brands.

Dr.Reddy’s Labs

  • Dr. Reddy has set up targets for itself under the theme “Horizon 2”. It aims to serve 1.5 billion patients. It is now 1.2x away from the target. It also aims to deliver 25% EBITDA margins and RoCE. The Company has managed to achieve both these targets.
  • The Company explores business spaces like nutraceuticals, cell and gene therapy, and NCEs. These will be researched at its subsidiary Aurigene Oncology Limited. 
  • Dr. Reddy is also looking to set up integrated digital healthcare services, digital therapeutics, and disease management. The Company is early in its development and has made some progress.
  • In the medium, the Company will focus on expanding its presence in nutraceuticals. It will also continue to focus on complex formulations, primarily injectable and oral solid dosage forms while focusing on biosimilars, and differentiated formulations in the longer term.

Key Metrics

We have now understood both the Companies’ business as well as taken a good comparative look at their financials. Now let us look at a few Key Metrics of Cipla Vs Dr. Reddy’s Laboratories

ParticularsCiplaDr. Reddy's
Market Cap (Cr.)₹94,222₹90,284
EPS₹39 ₹283.19
Stock P/E32.1920.23
Book Value₹302.53 ₹1,456.59
Price to Book Value4.113.89
Promoter Holding33.47%26.69%


As we reach the end of this comparative article Cipla Vs Dr. Reddy’s Laboratories, we see that both businesses are quite similar, when it comes to the products they produce, which are mostly generic drugs.

Cipla mainly focuses on the respiratory and Anti-infectives market, while Dr. Reddy on Gastrointestinal and cardiovascular markets. Cipla’s strong geographical market is its India market, while for Dr. Reddys it’s North America.

One thing to note is that 5 Years ago, Cipla was a bigger company compared to Dr. Reddy’s, but the strong revenue growth at Dr. Reddy’s has brought it into the lead. Dr. Reddy also performs significantly better in terms of margins as well as Returns to its shareholders.

However, looking at the future outlook it looks like Cipla has made a host of new acquisitions that could lead its growth in the years to come. Both the Company are focusing on developing biosimilars and expecting digital transformations in health to drive business.

With this we finally reach the end of our article, do let us know what you think about both these Companies. Also, do you think Cipla’s latest acquisitions will improve its revenue and profit in the following years?

Written by Nasir Hussain

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