EQUITY RESEARCH

REPORT

LTP: Rs. 921.80|TP Best case: Rs. 1184.14 |TP Base case: Rs. 1040.14| Return- (13-28) % | Date- 03/08/2021

BUY
Company Overview
PARTICULARS:
Cipla is a leading pharmaceutical from India with presence across the world. It Market Capitalization 74,356 crs
was established in 1935 as Chemical Industrial & Pharmaceutical Laboratories Shares Outstanding 80.66 crs
Ltd and changed to its current name in 1984. The company has a vast portfolio Cash (FY 2021) 793.29 crs
with more than 1,500 products in the market. The company’s business is Adjusted Beta 0.60
divided into three strategic units - APIs, respiratory and Cipla Global Access. Its 52-week High 997
largest market is India, followed by Africa and North America. Company’s total 52-week Low 704.4
revenue reached Rs. 13,900 in FY 2021. Face Value Rs.2
Dividend Yield 0.54%
NSE Code CIPLA
BSE Code 500087
Key Highlights

• In March 2021, Cipla received the final approval for its abbreviated
SHAREHOLDING PATTERN:
new drug application (ANDA) for Sumatriptan Nasal Spray, 20 mg,
from the United States Food and Drug Administration. Promoters 36.66%
• In March 2021, the company announced that its subsidiary, Cipla Gulf Indian Institutional 16.76%
FZ LCC, will partner with Alvotech for marketing and distribution of Investors
four biosimilar medicines in Australia and New Zealand. Foreign 23.23%
• In January 2021, it announced to procure solar energy from a 20- Institutional
MWac (megawatt, alternating current) group captive project in Investors
Tuljapur, Maharashtra, that was commissioned in partnership with GDR 0.17%
AMP Energy India. Others 23.18%
• Robust COVID profile portfolio with strong chronic portfolio are the TOTAL 100%
key catalysts for CIPLA. Company is spending heavily in R&D expenses.
Along with that the company maintains a strong base in USA as well as
Africa.
• Company can continue to expect robust revenue from the domestic STOCK v/s NIFTY
market too, due to higher chances third wave of Covid-19 in India and Stock v/s Nifty
good market share in respiratory segment. 1,500.00 20,000.00
1,000.00 15,000.00
10,000.00
500.00 5,000.00
- -
01-11-2020
01-08-2020
01-09-2020
01-10-2020

01-12-2020
01-01-2021
01-02-2021
01-03-2021
01-04-2021
01-05-2021
01-06-2021
01-07-2021
01-08-2021

VALUATION AND OUTLOOK

CIPLA NIFTY 50
Due to ongoing COVID-19 pandemic & high chances for occurrence of
potential 3rd wave in the country, I believe the company can continue to
expect high revenue, driven from medicines like Remdesivir, Tocilizumab,
Roche- cocktail and other respiratory medicines and continued spending on
R&D. The company is having strong cash flows, y-o-y revenue growth, & cost
optimization. Having said that, I estimated increase in the company’s revenue Research Analyst:
growth rate somewhere from 8.5% to 12%, under base and best-case
scenarios of DCF Analysis. With a promising outlook, I recommend BUY rating Shreya Jain
on the stock with TP OF Rs.1184 under best case & Rs. 1040 under base case, Jainshreya005@gmail.com
driven by 24x EBITDA multiple and DCF modelling. For best estimates, I
assumed it be average of both the type of analysis. As per DCF Analysis the
Intrinsic value under best case scenario came out to be Rs.1,127.83, while under Relative valuation it came out to be Rs.
1240.45. Hence, I assumed it to be the average of both of these numbers. Under Base case scenario, the intrinsic value
came out to be Rs. 839.83, while as per Relative valuation it came out to be Rs. 1240.45, hence the average came out to be
Rs. 1040.14.

PROJECTED FINANCIALS SNAPSHOT

Rs. in Crs FY19 FY20 FY21 FY22E FY23E FY24E

Revenue 16,362.41 17,131.99 19,159.59 21,822.22 24,397.27 26,800.65

y-o-y growth % 8% 5% 12% 12% 12% 10%

EBITDA 3,556.71 3,502.73 4,505.63 6,201.15 7,637.34 8,673.29

EBITDA 2,230.40 2,328.08 3,437.97 5,277.52 6,713.72 7,505.35

EAT 1,492.44 1,499.52 2,388.51 3,837.43 4,900.10 5,480.31

EV/EBITDA 0.32 0.32 0.25 0.18 0.15 0.13

EV/Revenue 5.85 5.59 5.00 4.39 3.92 3.57

Rs. in Crs FY19 FY20 FY21 FY22E FY23E FY24E

A. Non-Current Assets

(a) Property, plant and equipment 5,114.35 4,805.32 4,618.14 5,196.62 5,839.66 6,522.33

(b) Right-of-use assets - 322.73 338.13 338.13 338.13 338.13

(c) Capital work-in-progress 331.05 421.00 570.84 675.63 756.71 832.38

(d) Investment Properties 61.85 124.30 121.75 121.75 121.75 121.75

(e) Goodwill 2,869.14 2,934.00 3,007.29 3,007.29 3,007.29 3,007.29

(f) Intangible assets 1,563.02 1,496.54 1,430.21 1,430.21 1,430.21 1,430.21

(g) Intangible assets under development 345.13 403.53 398.05 398.05 398.05 398.05

(h) Investment in Associates 234.49 234.97 228.38 228.38 228.38 228.38

(i) Financial assets

(i) Investments 193.86 219.53 195.30 195.30 195.30 195.30

(ii) Loan Receivable 49.42 52.39 52.99 52.99 52.99 52.99

(iii) Other financial assets 93.21 42.04 42.88 42.88 42.88 42.88

(j) Income tax assets 345.59 468.62 468.16 468.16 468.16 468.16

(k) Deferred tax assets, (net) 201.41 239.77 314.69 314.69 314.69 314.69

(l) Other non-current assets 134.17 191.64 155.57 285.62 319.90 351.88
B. Current assets

(a) Inventories 3,964.83 4,377.60 4,669.18 4,931.33 5,523.08 6,075.39

(b) Financial assets

(i) Investments 2,125.79 1,016.52 2,286.37 2,286.37 2,286.37 2,286.37

(ii) Trade receivables 4,150.72 3,891.31 3,445.68 4,442.84 4,975.98 5,473.58

(iii) Cash and cash equivalents 508.36 742.38 793.29 4,212.15 7,664.02 11,664.63

(iv) Bank balances 110.45 261.53 607.94 607.94 607.94 607.94

(v) Loans Receivables 6.28 5.60 2.58 2.58 2.58 2.58

(vi) Other financial assets 497.87 522.28 481.66 481.66 481.66 481.66

(c) Other current assets 1,060.33 886.62 894.33 1,245.11 1,394.52 1,533.97

Asset classified as held for sale (Net) 2.00 2.34 28.48 28.48 28.48 28.48

Total Assets 23,963.32 23,662.56 25,151.89 30,994.16 36,478.74 42,459.03

 Rs. in Crs FY19 FY20 FY21 FY22E FY23E FY24E
EQUITY AND LIABILITIES

A. Equity

(a) Equity share capital 161.14 161.25 161.29 161.29 161.29 161.29

(B) Other equity 14,851.14 15,601.75 18,165.24 22,002.67 26,902.77 32,383.08

Equity attributable to owners of the Parent 15,012.28 15,763.00 18,326.53 22,163.96 27,064.06 32,544.37

( C ) Non-controlling interests 331.97 294.28 259.06 290.06 324.78 363.65

Total equity (A) 15,344.25 16,057.28 18,585.59 22,454.03 27,388.84 32,908.02

B. Liabilities

(A) Non-current liabilities

(a) Financial Liabilities

(i) Borrowings 3,830.07 2,369.28 1,202.75 2,941.91 2,941.91 2,941.91

(ii) Other financial liabilities 387.45 276.90 295.61 295.61 295.61 295.61

(b) Long term Provisions 121.41 133.27 116.17 106.77 112.73 116.41

(C) Deferred tax liabilities (Net) 425.32 365.21 296.61 296.61 296.61 296.61

(d) Other non- current Liabilities 83.31 67.48 63.61 63.93 64.24 64.56

Total non-current liabilities (B) 4,847.56 3,212.14 1,974.75 3,704.83 3,711.11 3,715.11

(B) Current liabilities

(a) Financial liabilities

(i) Borrowings 486.16 447.15 334.73 434.23 434.23 434.23

(ii) Trade payables 1,947.99 2,281.81 2,066.82 2,401.07 2,689.20 2,958.12

(iii) Other current financial liabilities 398.43 530.36 733.99 733.99 733.99 733.99

(b) Other current liabilities 143.43 176.29 359.22 304.36 340.88 374.97

(c) Short term Provisions 736.76 948.19 1,078.32 943.59 1,162.43 1,316.54

(d) Current tax liabilities (Net) 58.74 9.34 18.06 18.06 18.06 18.06

Total current liabilities (C) 3,771.51 4,393.14 4,591.14 4,835.30 5,378.78 5,835.90

Total liabilities (B+C) 8,619.07 7,605.28 6,566.30 8,540.13 9,089.89 9,551.01

Total equity and liabilities (A+B+C) 23,963.32 23,662.56 25,151.89 30,994.16 36,478.74 42,459.03

Rs. in Crs FY19 FY20 FY21 FY22E FY23E FY24E

EBIT 2,230.40 2,328.08 3,437.97 5,277.52 6,713.72 7,505.35

- - - - - -
Operating taxes 616.05 689.67 932.34 1,319.38 1,678.43 1,876.34
- - - - - -
Operating tax rate 0.28 0.30 0.27 0.25 0.25 0.25

NOPAT 1,614.35 1,638.41 2,505.63 3,958.14 5,035.29 5,629.02

- - - - - -
Add- Depreciation 1,326.31 1,174.65 1,067.66 923.63 1,039.32 1,167.93

Gross Cash Flow 288.04 463.76 1,437.97 3,034.51 3,995.96 4,461.08

- - - - -
Less - Investments in working capital 1,634.60 973.08 1,465.43 730.83 732.24 731.50
- - - - - -
Less- Investment in capex 1,125.31 865.62 880.48 1,502.11 1,682.37 1,850.60
- -
Free cash flow to firm 797.33 1,374.94 907.94 801.57 1,581.35 1,878.98

RATIONALES OF ASSUMPTIONS

Revenue growth is assumed to be 12% for initial years and then gradually decreased going forward. The reasons for high
revenue growth have been explained in Page-1. While, cost of materials is taken on the basis of revenue. Though there are
inflationary pressures currently in the country, but due to subsidies in pharma product manufacturing and govt. support to
this particular industry, I haven’t taken very aggressive percentages. The government’s encouragement (‘Atma Nirbhar
Bharat’ policy), a lot of reforms in the policy to incentivize the industry and thrust being given to innovation, among others,
augur well for the industry. Depreciation is calculated on the basis of % of opening balance and is kept at par with previous
year’s average that is 23%. Finance cost is measured as a percentage of EBIT, and kept it at par with the corporate tax rate
that is 25%. While other expense is either kept same as FY21 or measured as an average for PYs. Most of the Balance
sheet items are taken same as FY21, or as average of PY. Cash has been calculated as plug-in method for the sake of
simplicity.
VALUATION ANALYSIS: DCF Analysis

A Discounted Cash Flow Analysis is used to estimate the Intrinsic value of Cipla, due to predictability of cash flows in
relation to growth and profitability. This model is driven by Unlevered Free Cash Flows as this represents cash that is
available for debt & equity holders and is calculated as EBIT minus taxes, plus D&A, minus Capex & changes in Net Working
Capital. The DCF model is most sensitive to following factors, the derivation of which are explained below:

WACC: For the purpose of calculation WACC, I have estimated the company D/E ratio to estimate the respective weights of
Debt & Equity, which came out to be 10%. For calculating cost of equity, I have used the CAPM Model, which the Risk-free
rate is 10-year Government Bond Yield as on 3rd August 2021 and Rm is 6.85%. Beta is calculated using the past 5 years
monthly stock prices and then adjusted for mean reversion. The cost of debt is calculated using the interest expenses less
taxes. As per calculations, WACC came out to be 10%.

Terminal Growth Rate: Ideally, it is based on long term GDP growth rate and inflation rate. And is usually same as inflation
rates and less than economy growth rate. So, the current inflation rate in India is 6.26% and GDP growth rate estimate is
7%, which is less due to contractions in Indian economy due to two critical covid waves. So, I assumed the terminal rate as
6.5%, which is somewhere in between both the metrics. Also, as per standards the terminal rates can also be determined
on the basis of stage of the business and could be taken as- Early stage- More than 10%, Decelerated/Growth stage- 5 to
8%, Mature stage- 3 to 4%. Hence, I assume the company to be in growth stage and hence 6.5% Terminal growth rate
should be justified. Also, performed sensitivity analysis for taking into considerations all possibilities.

Sensitivity Analysis: As we can’t rely on number due to the fact that with DCF modelling lots of assumptions are involved, I
conducted sensitivity analysis to get range of potential values, at which change in enterprise vale and equity value per
share trade, by using change in two most important variables - perpetuity growth rate and WACC. With sensitivity analysis,
it could be seen that even with a very small change in the discount rate or growth rate, there can be heavy impact on share
price.

Rs. in Crs FY19 FY20 FY21 FY22E FY23E FY24E

Debt/Equity Ratio 0.30 0.20 0.10 0.10 0.10 0.10

Cost of debt 3% 3% 3% 3%
Tax rate 25% 25% 25% 25%
Adjusted cost of debt 3% 3% 3% 3%
Cost of Equity 10% 10% 10% 10%

Calculation of Intrinsic value and sensitivity analysis under DCF Modeling:

Total PV of Cash Flows 7,608.27 sensitivity Analysis of Equity Value per share
Continuing Value 1,39,334.97 WACC

PV of Continuing Value 88,106.38 1,127.83 9% 10% 11% 12%

Enterprise Value 95,714.65 6% 1,192.05 861.68 664.02 532.69
+Cash 793.29 g- 7% 1,429.52 984.33 737.62 581.11
-Financial liabilities -5,537.09 8% 3,566.79 1,720.26 1,105.65 798.98
Equity Value 90,970.85 9% 7,128.90 2,292.65 1,326.47 913.11
Number of shares outstanding 80.66
Price per share 1,127.83

Hence, the implied stock value came out to be Rs. 1,127.83 and as per DCF Analysis, I recommend the stock to buy as it is
undervalued. For the purpose of more reliability, I have also conducted relative valuation and have taken the average of
both the prices to arrive at the target price of the stock.
VALUATION ANALYSIS: Relative Valuation
VALUATION ANALYSIS: Relative Valuation

For our comparable universe I tried to select companies who are similar to Cipla. in terms of profitability, geographic area,
size, product offerings etc. However, due to lack to availability of data, I selected the peers which I could select best from
the free search from Google. My universe of companies includes- Sun Pharma Industry, Dr. Reddy’s Lab, Divi’s Lab, Cadila
Health, Lupin and Piramal Enterprise.

I concentrated on EV/EBITDA multiple as comparable as EBITDA is pre-depreciation, pre-interest cash flow figure. The
EV/EBITDA multiple range from 23.52x to 34.11x from its mean and median. As per relative valuation, the implied share
value came out to be Rs.1240.5, which clearly states that the company is currently undervalued compared to its peers and
hence I recommend a buy with this type of valuation also. I have also conducted one variable sensitivity analysis for
different multiples.

Calculation of Intrinsic value and sensitivity analysis under Relative Valuation

Peers EV/EBITA Industry Multiple 23.52x sensitivity Analysis

EBITDA
Cipla 17.54x Last FY Metric 4,303.00 Multiple Share price

Sun Pharma Industry 63.27x Implied Enterprise Value 1,01,194.41 Current 1,240.45
-
Dr. Reddy's Lab 19.14x Less: Debt 1,755.56 17.80x 935.45
-
Divi's Lab 42.99x Less: Minority Interest 259.06 18.00x 946.12

Cadila Health 20.67x Add: Cash 874.80 19.00x 999.47

Lupin 23.52x Implied Equity Value 1,00,054.59 25.00x 1,319.55

No. of shares
Piramal Enterprise 51.64x Outstanding 80.66 30.50x 1,612.96

Median 23.52x Intrinsic Value 1,240.45 34.00x 1,799.68

Price Target and Range

For the purpose of arriving at a

target price, I have taken an
average of the intrinsic value that
came out from DCF Analysis and
Relative Valuations.

Under the Best-case scenario, the

average of both came out to be Rs.
1,184.14, while under the Base
case scenario, the average came
out to be Rs. 1040.14. Hence,
under both the analysis, the signal
is BUY.

I have also conducted a football

field analysis and it could be clearly
seen from the graph in the right
that the stock is currently at down
side, while its potential is at upside
and hence the stock is currently
undervalued.
Key Ratios and Graphs

Particulars FY18 FY19 FY20 FY21 FY22E FY23E FY24E

Profitability Ratios

EBITDA Margin 0.21 22% 20% 24% 28% 31% 32%

EBIT Margin 0.12 14% 14% 18% 24% 28% 28%

Net Profit Margin 0.09 9% 9% 12% 18% 20% 20%

Return on Assets 0.06 6% 6% 9% 12% 13% 13%

Return on Equity 0.10 10% 9% 13% 17% 18% 17%

Liquidity Ratios

Current Ratio 2.82 3.29 2.66 2.87 3.77 4.26 4.82

Quick Ratio 1.77 2.24 1.67 1.85 2.75 3.24 3.78

Cash Ratio 0.25 0.16 0.23 0.31 1.00 1.54 2.10

Activity Ratio

Total Asset t/o Ratio 0.17 0.17 0.18 0.20 0.19 0.18 0.17
Financial Leverage

Debt/Asset 0.29 0.29 0.25 0.18 0.22 0.19 0.17

Debt/Equity 0.46 0.46 0.37 0.25 0.30 0.26 0.22

- - - - - - -
Interest Coverage 27.85 21.12 17.75 28.04 38.53 42.37 43.74

Debt/Total Capital 0.18 0.18 0.15 0.11 0.13 0.11 0.10

Key Ratios and Multiples

Earnings per share (EPS) 17.56 18.50 18.59 29.61 47.58 60.75 67.94

EV/Sales 6.29 5.85 5.59 5.00 4.39 3.92 3.57

EV/EBITDA 30.09 26.91 27.33 21.24 15.43 12.53 11.04

EV/EBIT 51.50 42.91 41.11 27.84 18.14 14.26 12.75

P/E 52.49 49.82 49.58 31.13 19.38 15.17 13.57

- - -
P/FCF 21.74 93.25 54.08 81.89 92.76 47.02 39.57

P/EBITDA 23.37 20.90 21.23 16.50 11.99 9.74 8.57

Market Value v/s Intrensic Value ( DCF )

₹1,200.00 ₹1,127.83
Revenue v/s Profits
₹1,000.00 ₹921.80
40,000.00
₹800.00
30,000.00
₹600.00
20,000.00
₹400.00
10,000.00
₹200.00
-
₹-
Current price (02/08/2021) Intrensic value (DCF
Total Revenue Net Income Valuation)

Stock v/s Nifty Market Price v/s Intrensic Value (Relative

Valuation)
1,200.00 18,000.00 ₹1,400.00
₹1,240.45
16,000.00
1,000.00
14,000.00
₹1,200.00
800.00 12,000.00 ₹1,000.00 ₹921.80
10,000.00
600.00
8,000.00 ₹800.00
400.00 6,000.00
200.00
4,000.00 ₹600.00
2,000.00
- - ₹400.00
₹200.00
₹-
Implied Share Price Current price (02/08/2021)
CIPLA NIFTY 50
INDUSTRY OVERVIEW: INDIAN PHARMA INDUSTRY

India is the largest provider of generic drugs globally. Indian pharmaceutical sector supplies over 50% of global demand for
various vaccines, 40% of generic demand in the US and 25% of all medicine in the UK. Globally, India ranks 3rd in terms of
pharmaceutical production by volume and 14th by value. The domestic pharmaceutical industry includes a network of
3,000 drug companies and ~10,500 manufacturing units.
India enjoys an important position in the global pharmaceuticals sector. The country also has a large pool of scientists and
engineers with a potential to steer the industry ahead to greater heights. Presently, over 80% of the antiretroviral drugs
used globally to combat AIDS (Acquired Immune Deficiency Syndrome) are supplied by Indian pharmaceutical firms.

Market Size: According to the Indian Economic Survey 2021, the domestic market is expected to grow 3x in the next
decade. India’s domestic pharmaceutical market is estimated at US$ 42 billion in 2021 and likely to reach US$ 65 billion by
2024 and further expand to reach ~US$ 120-130 billion by 2030. India's biotechnology industry comprising
biopharmaceuticals, bio-services, bio-agriculture, bio-industry, and bioinformatics. The Indian biotechnology industry was
valued at US$ 64 billion in 2019 and is expected to reach US$ 150 billion by 2025. India’s drugs and pharmaceuticals
exports stood at US$ 24.44 billion in FY21.

Investments and Recent Developments: he Union Cabinet has given its nod for the amendment of existing Foreign Direct
Investment (FDI) policy in the pharmaceutical sector in order to allow FDI up to 100% under the automatic route for
manufacturing of medical devices subject to certain conditions. The drugs and pharmaceuticals sector attracted cumulative
FDI inflow worth US$ 17.75 billion between April 2000 and December 2020 according to the data released by Department
for Promotion of Industry and Internal Trade (DPIIT). Some of the recent developments/investments in the Indian
pharmaceutical sector are as follows:
• In May 2021, the Government of India invited R&D proposals on critical components and innovations in oxygen
concentrators by June 15, 2021.
• In May 2021, Indian Immunological Ltd. (IIL) and Bharat Immunological and Biologicals Corporation (BIBCOL) inked
technology transfer pacts with Bharat Biotech to develop the vaccine locally to boost India's vaccination drive. The
two PSUs plan to start production of vaccines by September 2021.
• In May 2021, Eli Lilly & Company issued non-exclusive voluntary licenses to pharmaceutical companies—Cipla Ltd.,
Lupin Ltd., Natco Pharma & Sun Pharmaceutical Industries Ltd.—to produce and distribute Baricitinib, a drug for
treating COVID-19.
• In April 2021, the CSIR-CMERI, Durgapur, indigenously developed the technology of Oxygen Enrichment Unit (OEU).
The unit can deliver medical air in the range of ~15 litres per minute, with oxygen purity of >90%. It transferred the
technology to MSMEs—Conquerent Control Systems Pt. Ltd., A B Elastic Products Pvt. Ltd. and Automation
Engineers, Mech Air Industries and Auto Malleable.
• In April 2021, National Pharmaceutical Pricing Authority (NPPA) fixed the price of 81 medicines including off-patent
anti-diabetic drugs allowing due benefits of patent expiry to the patients.
• In February 2021, Aurobindo Pharma announced plans to procure solar power from two open access projects of
NVNR Power and Infra in Hyderabad. The company will acquire 26% share capital in both companies with an US$
1.5 million investment. The acquisition is expected to be completed by the end of March 2021.
Government Initiatives:
• To achieve self-reliance and minimise import dependency in the country's essential bulk drugs, the Department of
Pharmaceuticals initiated a PLI scheme to promote domestic manufacturing by setting up greenfield plants with
minimum domestic value addition in four separates ‘Target Segments’ with a cumulative outlay of Rs. 6,940 crore
(US$ 951.27 million) from FY21 to FY30.
• In May 2021, under Atmanirbhar Bharat 3.0, Mission COVID Suraksha was announced by the Government of India
to accelerate development and production of indigenous COVID vaccines. To augment the capacity of indigenous
production of Covaxin under the mission, the Department of Biotechnology, Government of India, provided
financial support in the form of a grant to vaccine manufacturing facilities for enhanced production capacities,
which is expected to reach >10 crore doses per month by September 2021.
• In April 2021, the Union Government decided to streamline and fast-track the regulatory system for COVID-19
vaccines that have been approved for restricted use by the US FDA, EMA, UK MHRA, PMDA Japan or those listed in
the WHO Emergency Use Listing (EUL). This decision is likely to facilitate quicker access to foreign vaccines by India
and encourage imports.
• In February 2021, the Punjab government announced to establish three pharma parks in the state. Of these, a
pharma park has been proposed at Bathinda, spread across ~1,300 acres area and project worth ~Rs. 1,800 crore
(US$ 245.58 million). Another medical park worth Rs. 180 crore (US$ 24.56 million) has been proposed at Rajpura
and the third project, a greenfield project, has been proposed at Wazirabad, Fatehgarh Sahib.
• Under Union Budget 2021-22, the Ministry of Health and Family Welfare has been allocated Rs. 73,932 crore (US$
10.35 billion) and the Department of Health Research has been allocated Rs. 2,663 crore (US$ 365.68 billion). The
government allocated Rs. 37,130 crore (US$ 5.10 billion) to the 'National Health Mission’. PM Aatmanirbhar
Swasth Bharat Yojana was allocated Rs. 64,180 crore (US$ 8.80 billion) over six years. The Ministry of AYUSH was
allocated Rs. 2,970 crore (US$ 407.84 million), up from Rs. 2,122 crore (US$ 291.39 million).

Roads Ahead:
• Medicine spending in India is projected to grow 9 12% over the next five years, leading India to become one of the
top 10 countries in terms of medicine spending.

• Going forward, better growth in domestic sales would also depend on the ability of companies to align their
product portfolio towards chronic therapies for diseases such as such as cardiovascular, anti-diabetes, anti-
depressants and anti-cancers, which are on the rise. The Indian Government has taken many steps to reduce costs
and bring down healthcare expenses. Speedy introduction of generic drugs into the market has remained in focus
and is expected to benefit the Indian pharmaceutical companies. In addition, the thrust on rural health
programmes, lifesaving drugs and preventive vaccines also augurs well for the pharmaceutical companies.

SOURCES AND REFERENCES

I have used the following references and sources for the purpose of preparing the Equity Research Report and Financial
Modelling Analysis:
1. https://www.ibef.org/industry/pharmaceutical-india.aspx
2. Company Annual Reports
3. Equity Research Reports prepared by- Edelweiss, Geojit, HDFC Securities, ICICI Direct, Prabhulal Liladas, Wutis.
4. https://trendlyne.com/research-reports/stock/268/CIPLA/cipla-ltd/
5. https://in.finance.yahoo.com/quote/CIPLA.NS
6. https://www.screener.in/company/CIPLA/
7. https://www.valueresearchonline.com/stocks/748/cipla-ltd/#snapshot
8. https://economictimes.indiatimes.com/cipla-ltd/stocks/companyid-13917.cms
9. https://ticker.finology.in/company/CIPLA
10. https://www.moneycontrol.com/india/stockpricequote/pharmaceuticals/cipla/C
11. https://www.cipla.com/home
12. Media Reports

**All the analysis in this report is prepared by Shreya Jain who is currently a CFA Level-2 and MBA candidate. This
analysis report is prepared only for academic & learning purposes and it doesn’t intend to suggest buy or sell call. Any
investment solely made on this report is not recommended. **