Cipla vs Sun Pharmaceutical – Financials, Future Planning & More

Cipla vs Sun Pharmaceutical: Pharmaceutical companies bear enormous responsibility for producing drugs through patent protection and monetizing the time and effort invested over years of research and development. In this article, we will compare Cipla and Sun Pharmaceutical in the pharmaceutical industry. We will also look at their finances, future plans, etc.

Cipla vs Sun Pharmaceutical

Cipla

Company Overview

Cipla was founded in Mumbai in 1935 by Khwaja Abdul Hamied. The company’s portfolio includes complexes and drugs in respiratory, antiretroviral, urology, cardiology, anti-infective, CNS and other key therapeutic areas.

Cipla’s diverse offering has helped it expand its product portfolio and expand its presence in India as well as South Africa, North America and other key regulated and emerging markets. Cipla’s 47 manufacturing sites worldwide produce more than 50 formulations and 1,500 generic products for 85 markets.

segment analysis

In FY23, the company earned 98% of its revenue from its Pharmaceuticals segment, which develops, manufactures and sells pharmaceutical products, and the remaining 2% from its Emerging Ventures segment, which includes revenue from its Consumer Healthcare, Biosimilars and Specialty businesses segments. .

As of FY23, India accounted for 43.37% of sales, followed by the United States (24.96%), South Africa (10.26%) and 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 by Dilip Shanghvi at Vapi, Gujarat. Sun Pharma is present in more than 100 countries. Sun Pharma has a multicultural workforce spanning more than 50 countries. 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 technology, strong manufacturing capabilities, and global commercial presence enable it to meet the changing needs of patients and customers globally.

Sun Pharma has extensive and diversified manufacturing facilities across multiple countries with approvals from key regulatory agencies. The company’s manufacturing capabilities include pills, capsules, injectables, sprays, ointments, creams, liquids, drug delivery systems, APIs and intermediates.

segment analysis

The company generates revenue from various geographies, including India (32.72%), United States (32.28%), Emerging Markets (19.78%), and Rest of the World (15.22%).

The company generates revenue through the sale of pharmaceuticals, including generics, specialty drugs, and APIs.

industry analysis

The pharmaceutical industry is developing rapidly, and advances in research and technology are making this field more promising for treating diseases. According to an IQVIA report, the global pharmaceutical market is expected to grow at a compound annual growth rate (CAGR) of 3-6% between 2023 and 2027, reaching $1.9 trillion by 2027.

India accounts for 60% of global vaccine production and 20% of global generic drug supply. India’s pharmaceutical industry is expected to grow from $65 billion in 2024 to $130 billion in 2030.

Cipla vs Sun Pharmaceutical – Finance

Sales and Net Profit

In FY23, Cipla and Sun Pharma’s revenue was Rs. 22,753.12 crore and Rs. It recorded $43,885.68 billion, an increase of 4.54% and 13.53%, respectively, compared to the previous year. The CAGR was 8.91% and 10.85%, respectively.

The net profit of Cipla and Sun Pharma is Rs. 2,832.89 crore and Rs. 8,560.84 crore in FY23. The CAGR was 17.93% and 27.80%, respectively. Cipla and Sun Pharma grew 11.24% and 151.35% year-on-year.

Sun Pharma surpassed Cipla in terms of revenue and net profit growth. Both companies are growing at a healthy pace in terms of revenue. Cipla’s net profit is increasing compared to Sun Pharma. Sun Pharma has fluctuated over the past five years, but has gradually improved since then.

profit

Cipla and Sun Pharma recorded OPM of 21.93% and 25.50% respectively in FY23. The five-year averages were 20.46% and 23.44%.

In FY23, NPM of Cipla and Sun Pharma were 12.30% and 19.60% respectively. The five-year average was 10.93% and 11.56%.

Cipla’s OPM is increasing every year while Sun Pharma’s OPM is fluctuating. Cipla and Sun Pharma’s NPM is improving and has been improving in the Corona era.

rate of return

Cipla and Sun Pharma recorded ROE of 12.60% and 15.10% respectively in FY23 compared to 12.80% and 6.80% in FY22. The averages were 11.99% and 8.56%, respectively.

The RoCE of Cipla and Sun Pharma in FY23 was 18.19% and 17.24%, respectively, compared to 17.24% and 9.28% in FY22. The five-year average was 15.55% and 10.18%.

Sun Pharma improved its RoE more than Cipla in FY23, and Cipla’s RoCE outperformed Sun Pharma despite an exponential increase in returns over FY22. However, RoCE is higher than RoE for both companies, indicating better debt utilization.

debt analysis

In FY23, the debt-to-equity ratios of Cipla and Sun Pharma were 0.02 and 0.12, respectively. The average for the two companies over five years was 0.12.

The interest coverage ratios of Cipla and Sun Pharma in 2023 were 45.90x and 56.7x, respectively. The average for 5 years was 27.15 times and 41.66 times.

Cipla and Sun Pharma’s D/E ratios have increased but debt growth is under control. Cipla’s interest coverage improved marginally, while Sun Pharma’s ratio declined due to increased debt in FY23. In both ratios, both companies are in a better position.

key indicators

Let us compare some of the key indicators of Cipla and Sun Pharmaceutical.

Future Plans

Cipla

• Cipla is considering investing in R&D in clinical trials for respiratory products, peptide injectables and biosimilars to help generate growth and returns on invested capital.
• Cipla invests in Ethris to collaborate in developing mRNA-based therapeutics that could help maximize shareholder value.
• The company plans to increase its U.S. market share by incorporating gRevlimitid into its portfolio.
• Signed an agreement with Novartis to expand its market presence under the Galvas brand.

Sun perm

• In India, the company launched 105 new products.
• We increased our field workforce by 10% in FY23 to support our growth and presence in tier 2 and tier 3 cities.
• Sun Pharma acquired Concert Pharmaceuticals to diversify its specialty products and the launch of sezaby was added to its portfolio.
• The company acquired the Uractiv OTC platform to expand its presence in Romania and expects double-digit growth in Brazil and Romania.

conclusion

As we near the end, let’s take a quick look at Cipla and 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 surpassed 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 Santosh

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