Cipla Vs Sun Pharmaceutical: Pharma companies bear enormous responsibility for producing medicines and monetizing the time and effort spent on research and development for years by using patent protection. In this article, we will compare Cipla Vs Sun Pharmaceutical, both of which are involved in the pharmaceutical industry. we shall also see their financials, future plans and more
Table of Contents
Cipla Vs Sun Pharmaceutical
Cipla
Company Overview
Cipla was established in 1935 by Khwaja Abdul Hamied in Mumbai. The company’s portfolio includes complexes and drugs in the respiratory, anti-retroviral, urology, cardiology, anti-infective, CNS, and other key therapeutic fields.
Cipla’s various products have helped expand its product portfolio and have helped increase its presence across India, as well as in South Africa, North America, and other key regulated and emerging markets. Cipla’s 47 manufacturing sites around the world produce 50+ dosage forms and 1,500+ generic products for 85 markets.
Segment Analysis
In FY23, the company earns 98% of its revenue from Pharmaceuticals, which is the development, manufacturing, and sale of drugs, and the remaining 2% from New ventures, which includes income from consumer healthcare, biosimilars, and specialty business.
In FY23, India accounted for 43.37% of revenue, followed by the United States (24.96%), South Africa (10.26%), and the rest of the world (20.39%).
Sun Pharmaceutical
Company Overview
Sun Pharmaceutical Industries Limited is a leading global pharmaceutical company and India’s largest pharmaceutical company. It was founded in 1983 in Vapi, Gujarat, by Dilip Shanghvi. Sun Pharma has a presence in over 100 countries. Sun Pharma has a multicultural workforce comprising over 50 nationalities. The company is the world’s fourth-largest generic pharmaceutical company.
Sun Pharma’s portfolio includes innovative specialty medicines, branded generics, pure generics, and APIs. The company’s R&D skills, strong manufacturing capabilities, and global commercial presence enable it to meet the evolving needs of patients and customers worldwide.
Sun Pharma has a large and diverse manufacturing footprint spread across multiple countries, approved by major regulatory agencies. The company’s manufacturing capabilities include pills, capsules, injectables, sprays, ointments, creams, liquids, drug delivery systems, APIs, and intermediates, among others.
Segment Analysis
The company generates revenue from various geographies, including India (32.72%), the United States (32.28%), emerging markets (19.78%), and the rest of the world (15.22%).
The company derives its revenue from the sale of pharmaceutical products such as generics, specialty drugs, and APIs.
Industry Analysis
Pharmaceutical industries are rapidly evolving, and advances in research and technology have made the sector more promising for disease cure. As per the 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.
India accounts for 60% of global vaccine production and 20% of global generic medicine supply by volume. The pharmaceutical industry in India is projected to grow from $65 billion in 2024 to $130 billion by 2030.
Cipla vs Sun Pharmaceutical – Financials
Revenue and Net Profit
Cipla and Sun Pharma’s revenue in FY23 was Rs. 22,753.12 crore and Rs. 43,885.68 crore, respectively, up 4.54% and 13.53% year on year. CAGRs were 8.91% and 10.85%, respectively.
Net profits of Cipla and Sun Pharma stood at Rs. 2,832.89 crore and Rs. 8,560.84 crore in FY23. CAGRs were 17.93% and 27.80%, respectively. Cipla and Sun Pharma grew by 11.24% and 151.35%, year on year.
Sun Pharma has outperformed Cipla in terms of revenue and net profit growth. Both companies are growing at a healthy rate in terms of revenue. Cipla’s net profits are increasing in comparison to Sun Pharma’s, which has fluctuated over the last five years but has gradually improved since then.
| Particulars/ Financial Year | Revenue (Cr.) | Net Profit (Cr.) | ||||
|---|---|---|---|---|---|---|
| Cipla | Sun Pharma | Cipla | Sun Pharma | |||
| 2022-23 | ₹ 22,753.12 | ₹ 43,885.68 | ₹ 2,832.89 | ₹ 8,560.84 | ||
| 2021-22 | ₹ 21,763.34 | ₹ 38,654.49 | ₹ 2,546.65 | ₹ 3,405.82 | ||
| 2020-21 | ₹ 19,159.59 | ₹ 33,498.14 | ₹ 2,388.51 | ₹ 2,284.68 | ||
| 2019-20 | ₹ 17,131.99 | ₹ 32,837.50 | ₹ 1,499.52 | ₹ 4,186.79 | ||
| 2018-19 | ₹ 16,362.41 | ₹ 29,065.91 | ₹ 1,492.44 | ₹ 3,209.32 | ||
| CAGR (4 Years) | 8.59% | 10.85% | 17.93% | 27.80% | ||
Profit Margins
Cipla and Sun Pharma had OPMs of 21.93% and 25.50% in FY23, respectively. The average stood at 20.46% and 23.44% over 5 years.
In FY23, Cipla and Sun Pharma’s NPM were 12.30% and 19.60%, respectively. The average stood at 10.93% and 11.56% over 5 years.
Cipla’s OPM is increasing year on year, while Sun Pharma’s is fluctuating. Cipla and Sun Pharma’s NPM is improving and has been improving COVID time.
| Particulars/ Financial Year | OPM (%) | NPM (%) | ||||
|---|---|---|---|---|---|---|
| Cipla | Sun Pharma | Cipla | Sun Pharma | |||
| 2022-23 | 21.93% | 25.50% | 12.30% | 19.60% | ||
| 2021-22 | 20.73% | 26.50% | 11.60% | 8.50% | ||
| 2020-21 | 22.17% | 24.50% | 12.53% | 8.80% | ||
| 2019-20 | 18.56% | 20% | 9.03% | 11.60% | ||
| 2018-19 | 18.92% | 20.70% | 9.23% | 9.30% | ||
| Average (5 Years) | 20.46% | 23.44% | 10.93% | 11.56% | ||
Return Ratios
Cipla and Sun Pharma had ROEs of 12.60% and 15.10% in FY23, respectively, compared to 12.80% and 6.80% in FY22. The average was 11.99% and 8.56%, respectively.
Cipla and Sun Pharma’s RoCE in FY23 were 18.19% and 17.24%, respectively, compared to 17.24% and 9.28% in FY22. The average over 5 years stood at 15.55% and 10.18%.
Sun Pharma improved its RoE more than Cipla in FY23, and Cipla’s RoCE outperformed Sun Pharma despite the fact that its returns increased exponentially compared to FY22. However, RoCE is higher than RoE for both companies, indicating better debt utilisation.
| Particulars/ Financial Year | RoE (%) | RoCE (%) | ||||
|---|---|---|---|---|---|---|
| Cipla | Sun Pharma | Cipla | Sun Pharma | |||
| 2022-23 | 12.60% | 15.10% | 18.19% | 17.24% | ||
| 2021-22 | 12.80% | 6.80% | 17.24% | 9.28% | ||
| 2020-21 | 14.13% | 6.20% | 17.85% | 5.66% | ||
| 2019-20 | 10.09% | 8.30% | 12.53% | 10.07% | ||
| 2018-19 | 10.37% | 6.40% | 11.94% | 8.68% | ||
| Average (5 Years) | 11.99% | 8.56% | 15.55% | 10.18% | ||
Debt Analysis
In FY23, Cipla and Sun Pharma had debt-to-equity ratios of 0.02 and 0.12, respectively. Over a 5-year period, the average for both companies was 0.12.
Cipla and Sun Pharma’s interest coverage ratios in FY23 were 45.90 times and 56.7 times, respectively. The average stood at 27.15 and 41.66 times over 5 years.
Cipla and Sun Pharma’s D/E ratios have increased, but debt growth is under control. Cipla’s interest coverage has improved slightly, while Sun Pharma’s ratio has decreased due to debt growth in FY23. In both ratios, both companies are in a better position.
| Particulars/ Financial Year | Debt to Equity | Interest Coverage | ||||
|---|---|---|---|---|---|---|
| Cipla | Sun Pharma | Cipla | Sun Pharma | |||
| 2022-23 | 0.02 | 0.12 | 45.9 | 56.7 | ||
| 2021-22 | 0.04 | 0.03 | 43 | 72 | ||
| 2020-21 | 0.1 | 0.08 | 21.47 | 51.2 | ||
| 2019-20 | 0.18 | 0.18 | 12.04 | 18.4 | ||
| 2018-19 | 0.29 | 0.2 | 13.34 | 10 | ||
| Average (5 Years) | 0.12 | 0.12 | 27.15 | 41.66 | ||
Key Metrics
Let us compare some of the key metrics of Cipla Vs Sun Pharmaceutical.
| Particulars | Cipla | Sun Pharma |
|---|---|---|
| CMP | ₹ 1,205.65 | ₹ 1230.75 |
| Market Cap (Cr.) | ₹ 97,810 | ₹ 2,94,434 |
| RoE | 12.60% | 15.10% |
| EPS (TTM) | ₹ 42.77 | ₹ 35.63 |
| Dividend Yield | 0.94% | 1.17% |
| Promoter Holdings (%) | 33.47% | 54.48% |
| Enterprise Value (Cr.) | ₹ 97,304.38 | ₹ 2,88,700.28 |
Future Plans
Cipla
- Cipla is considering investing in R&D into clinical trials for respiratory products, peptide injectibles, and biosimilars to help with growth and return on capital invested.
- Cipla invests in Ethris to collaborate on the development of mRNA-based therapies that can help maximise shareholder value.
- The company intends to increase its market share in the United States by incorporating gRevlimid into its portfolio.
- It has entered into an agreement with Novartis to expand its market presence with the brand Galvas.
Sun Pharma
- In India, the company has launched 105 new products.
- Increased its field force by 10% in FY23 to support growth and presence in tier 2 and 3 cities.
- Sun Pharma acquired Concert Pharmaceuticals to diversify its speciality offerings, and the sezaby launch has been added to the portfolio.
- The company has acquired the Uractiv OTC platform in order to expand its presence in Romania, and it expects double-digit growth in Brazil and Romania.
Conclusion
As we near the end, we will take a quick look at Cipla Vs Sun Pharmaceutical. Both companies are pioneers in the pharmaceutical industry, with decades of experience in drug handling and manufacturing in India.
Sun Pharma is the largest company in the pharmaceutical industry and has outperformed Cipla in terms of financial growth. However, both companies have the potential to increase their market share through the variety of medicines they offer. What do you think about the company’s prospects? Let us know in the comments section below.
Written by Santhosh
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