Company analysis Report of Cipla pharmaceuticals limited

LOGO

COMPANY PROFILE

Khwaja Abdul Hamied, the founder of Cipla, was born on October 31, 1898.

In 1935, he set up The Chemical, Industrial & Pharmaceutical Laboratories, which came to be popularly known as Cipla.

On August 17, 1935, Cipla was registered as a public limited company with an authorised capital of Rs 6 lakhs.

Cipla was officially opened on September 22, 1937 when the first products were ready for the market.

July 4, 1939 was a red-letter day for Cipla, when the Father of the Nation, Mahatma Gandhi, honoured the factory with a visit.

BOARD OF DIRECTORS• Founder• Dr. K.A. Hamied

(1898-1972)• Chairman & Managing Director• Dr. Y.K. Hamied• Joint Managing Directors• Mr. M.K. Hamied

Mr. Amar Lulla• Non-Executive Directors• Mr. V.C. Kotwal

Dr. H.R. ManchandaMr. S.A.A. PintoMr. M.R. RaghavanMr. Ramesh ShroffMr. Pankaj Patel

PRODUCTS

• Back Alzheimer`s Dementia• Amoebicides/Antiprotozoals• Anabolic Steroids• Analgesics/Antipyretics• Anesthetic Agent• Antacids/Antiflatulents• Anthelmintics• Anti-Arthritis• Anti-Inflammatory Drugs• Anti-TB Drugs• Antiacne/Antipsoriatic Drugs• Antiallergic Drugs• Antibiotics/Antibacterials• Anticancer Drugs

Anticoagulant and Antithrombotic AgentsAntidepressantsAntidiabeticAntidiarrhoealsAntiemeticsAntiepilepticAntifungalAntimalarialsAntimigraine DrugsAntiobesity DrugsAntiosteoporotic AgentsAntiparkinson'sAntipsychotic

AntipsychoticAntiretroviralAntispasmodicsAntiulcerantsAntiviralsAnxiolytics/SedativesApetite StimulantsBenign Prostatic Hyperplasia DrugsCardiovascular AgentsCerebral VasodialatorsCholestrol Reducers / Hypolipedemic AgentsCough and ColdDiuretics

DiureticsErectile Dysfunction TherapyExpectorants/Cold Preparations/MucolytesEye and Ear PreparationsGout PreparationsHaematinic PreparationHaemorrhoelogic AgentsHaemostaticsHormone - Related DrugsHormone Replacement TherapyImmunosuppressantsIron ChelatorsIrritable Bowel SyndromeLaxativesMotility Regulators

COMPETITORS

RANBAXYNICHOLAS PIRAMAL SUN PHARMANOVARTISPFIZERREDDY LABS

AWARDS AND ACHIEVEMENTS

Cipla’s Director Received P.adma Bushan Award In 2005 i.e Dr.Y.K.Hamied.

Cipla launches medicinal aerosols for asthma in 1976.

Wins Chemexcil Award for Excellence for exports in 1980.

Cipla wins National Award for Successful Commercialisation of Publicly Funded R&D in 1988.

Set-up state-of-the-art facility for manufacture of formulations at Sikkim in 2007.

Company Strengths and Weaknesses

Analyzing Strengths and Weaknesses

• Areas of Strength:– Customer loyalty– Dominant market share position– Effectiveness of advertising– Quality sales force– Make and sell products of highest quality– High integrity as a company

Analyzing Strengths and Weaknesses

• Areas of Strength:– Excellence in product design and/or

performance– Low-cost, high operating skill– Leadership in product innovation– Efficiency in customer service– Personal relationships with customers– Effectiveness in sales promotion–Merchandising efficiency

Analyzing Strengths and WeaknessesAreas of weaknesses:

• Inadequate definition of customer for product/market development

• Ambiguous service policies• Too many levels of reporting in the organizational setup• Overlapping channels• Lack of top management involvement in new product

development• Lack of quantitative goals

Ratio Analysis

Liquidity Ratio’s.1)CURRENT RATIO:

CURRENT ASSETS CURRENT LIABILITIES

Interpretation: The liquidity position of the company is satisfactory because it has reached the ideal ratio 2:1.Compared to 2007 there is a decrease in year 2008.The company should decrease liabilties.

2005 2006 2007 2008

2.75 2.97 4.07 3.16

Quick Ratio: Current assets – inventories.

Current liabilities

Interpretation: The liquidity position of the company is satisfactory since it reached the ideal ratio 1:1 because the company the company can meet it’s daily requirements. The year 2007 it was2.23 but there is a decrease in 2008 to 1.81 because there is an increase in inventory stock.

2005 2006 2007 2008

1.25 1.47 2.23 1.81

LEVERAGE RATIO’S.

1)Debt equity Ratio

2)Proprietary Ratio

3)Fixed Asset Ratio

4)Interest Coverage RatiO

Debt Equity Ratio:

Long term debts/Equity share holder funds.

Interpretation: In 2007 debt equity ratio is 0.04 and there is an increase in 2008 because of increase of debts.

2005 2006 2007 20080.13 0.24 0.04 0.15

Proprietary Ratio:

Net Worth /Total Assets

Interpretation: We can observe a slight increase in 2005-2007 i.e 0.95 to 0.97.So,the company’s position is good and they should continue the same.

2005 2006 2007 20080.95 0.96 0.97 0.97

Fixed Assets Ratio:

Fixed Assets

Net worth

Interpretation: It is constant from 2007-2008 i.e., 0.97 in both the years.

2005 2006 2007 2008

2.37 2.32 2.42 2.42

Interest coverage Ratio: PBIT/Fixed Interest Charges

Interpretation: We see a drastic decrease from 2007-2008, because there is a decrease in profits & debts also increased. That means fixed interest charges increases.

2005 2006 2007 200872.46 66.71 167.28 76.01

Turn Over Ratios1)inventory holding periods

2)working capital turnover

3)inventory turnover ratio

4)fixed assets turnover ratio

Inventory Holding Period:

No.Of Days In Years/S.T.R

Interpretation: The company’s inventory holding period in 2007 was 189 days which was decreased to 166 days in year 2008.The company should continue to decrease its inventory holding period in future also.

2005 2006 2007 2008

194 Days 195 Days 184 Days 166 Days

Working Capital TurnOver Ratio Net Sales/Working Capital

Interpretation: The above mentioned ratio has decreased from 2005-2008,because of decrease in sales and working capital is increased.

2005 2006 2007 2008

2.24 2.09 1.82 1.61

Inventory TurnOver Ratio:

CGS/Avg. Inventory

Interpretation: We can see a increase from 1.96-2.17 in yrs 2007-2008.The company should control its C.G.S expenses.

2005 2006 2007 2008

1.86 1.85 1.96 2.17

Fixed Assets TurnOver Ratio:

TurnOver/ Fixed Assets

Interpretation: There is a gradual decrease from 2005 to 2008 because the sales are low &fixed assets not used optimally.

2005 2006 2007 2008

2.95 2.74 2.48 2.41

Profitability Ratio’s:1)Gross Profit Ratio

2)Operating Ratio

gross profit ratio: gross profit X 100 Sales

Interpretation: The gross profit ratio has slightly decreased in 2008 when compared to previous year because of increase in cost of goods sold expenses.

2005 2006 2007 200843.84% 45.77% 44.77% 43.12%

Operating Ratio:

CGS + Operating Exp X 100 Net Sales

Interpretation: The company’s operating ratio has increased from 79% to 84% because the company has controlled its operating expenses such as salaries, ads etc.,

2005 2006 2007 2008

80.65% 79.80% 79.99% 83.98%

I Owe My Sincere Thanks To Nagraj (HOD)