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Cipla LimitedFrom our inception, our whole philosophy has been based on self-reliance and

self-sufficiency. Yusuf Hamied, Chairman Cipla

Indian generic drug manufacturing companies are becoming the targets of the international majors

from the last one year in their thrust for entering the domestic market and to have leverage from

the low cost manufacturing facilities. Drugs worth US$ 90 billion are going off patent in the

coming years companies are moving forward to have a share in this market. Leading multinational

companies are targeting low cost advantage Indian generic pharma companies. After introduction

of product patent regime in 2005 in the place of process patent regime Indian pharma companies

are prevented from bringing out generic version of patented drugs. This new product regime has

pushed Indian pharma companies to legal battles with the multinational drug discovery companies.

And also Indian pharma companies are struggling to pursue the original drug discovery process.

Because of huge spending on Research & Development, margins are thin in this business.The acquisition of Indias largest pharma company Ranbaxy Laboratories Ltd. by Japanese pharma

major Daiichi Sankyo has surprised the experts in the pharma industry. Cipla Ltd., the second

largest Indian generic player has now become the largest player in the domestic market. Last year

Cipla has been in the news with the grapevine that it is becoming the acquisition target by the

Israeli Company Teya and later Mukesh Ambanis Reliance. This has been ruled out by

Dr. Hamied, Chairman Cipla at the companys shareholders meeting. But in the coming days

Indian generic pharma majors with global presence will definitely be the targets of acquisitions for

multinational drug making companies.

Indian Pharmaceutical Industry: Overview

Indian Pharmaceutical industry is one of the most dynamically developing and knowledge driven

industries. Pharmaceutical industry is a lifeline industry, which plays a crucial role in improving

health standards of people in a country, and is very essential for economic growth and

development. Indian pharmaceutical industry is moving up the value chain; from being a pure

reverse engineering industry focused on generic drug manufacturing. The industry is moving

towards basic research-driven, export-oriented global presence, providing wide range of value

added quality products and services like contract manufacturing and clinical research.

Currently, the pharma industry in India is a $12.8 billion industry, growing at a rate of 13%

annually. Nearly 50% of industry sales are contributed from exports. It is one of the fastest

growing segments in Indian economy; it contributed one percent to Indian GDP in 2006-2007. It is

one of the largest contributors to exports after IT industry. The output of Indian pharmaceutical

industry ranks fourth in terms of volume and 13th in terms of value and around 8% of the worlds

drugs are manufactured in India. India has 300 pharma companies of large and moderate size andanother 10,000 small and tiny firms. But 70% of the production is from the top 100 big companies.

The industry is highly fragmented, with the largest formulation players having a market share of

less than 6%. The industry manufactures about 400 bulk drugs and almost the entire range of

formulations. About a half of Indias production close to US$ 6 billion is exported and exports

are growing at 25% per annum. Major part of exports is to the US, while Germany, Russia, the

UK, Canada, Italy and Japan are among others. Large quantities of medicines are also exported to

China, Brazil, Nigeria and Mexico.


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accounting for 60 percent of the total pharma industry exports. Exports of bulk drugs are growingby 30 percent year on year. In terms of the inputs used in production of drugs the industry faceslow cost of inputs at competitive rates helped by the presence of a well-developed chemicalindustry. As the manufacture of most bulk drugs is neither capital intensive nor technologyintensive, process re-engineering encouraged the growth of production bases. There are a largenumber of bulk drug manufacturers in India, including many small scale industries. This has

increased competition, leading to a drop in prices and consequently lower margins.Figure 2: Market Share of Segments in 2007

Source: Pharmabiz.com.

Formulations are specific dosage forms of a bulk drug or of a combination of different bulk drugsand the final form in which the drugs are sold i.e., syrups, injections, tablets and capsules. India islargely self sufficient in case of formulations. Some life saving, new generation under-patentformulations continue to be imported, especially by MNCs, which then market them in India.More than 85 percent of the formulation production in the country is sold in the domestic market.Exports are largely to developing nations like China, South Africa, and CIS etc., and to countrieswith weak patent laws. To access the generic formulation market of developed countries, Indiancompanies will need tie-ups with international majors.

Figure 3: Therapeutic Segments Market Share in 2007

Source: Pharmabiz.com.

Therapeutic Segments

The pharmaceutical market can be divided into different therapeutic segments on the basis ofapplication. The shares of various therapeutic segments depend, to a great extent, on the level ofeconomic development, disease incidence and the availability of healthcare infrastructure. In India,anti-infectives account for the largest market share of about 14.7 percent in 2007. The respiratorysegment is the largest therapeutic segment in the OTC market. The growing urbanization andchanging life styles of the people exposed them to cardiovascular, diabetics, respiratory andobesity problems. This led to the increase in the sales of lifestyle drugs.


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Organized Vs. Unorganized

The industry is highly fragmented, there are about 325 large and medium scale companies

including 50 MNCs and about 11000 small scale enterprises in operation. There are around 330

organized companies which control 80% of the market while the unorganized controls remaining

20%. These units produce variety of formulations and about 350 bulk drugs. In bulk drugs, top 10

players control 44% of market share, while the rest control remaining 56%. The market is studded

with 60,000 brands in around 60 therapeutic segments. In Indian pharma industry Cipla, Ranbaxy

and Dr.Reddys are the key generic players.

Figure 4: Organized Vs. Unorganized

Source: Phamabiz.com

Performance

The visibility of Indian pharma industry in a global landscape can be assed given the fact that, in

2007 the global pharmaceutical industry has grown at 5% to reach the size of US$675 billion.

Indian pharma market accounts for nearly 2% of global market in terms of value and 8% in terms

of volume. Indian pharma industry has been growing at a CAGR of 13% for the last five years.

Currently the size of the Indian pharma industry is at around US$12.8 billion for the year 2007

with a growth rate of 13% of which exports account of nearly 50% of the market size. Present size

of Indian domestic pharma industry is US$6.2 billion which has grown at the rate of 13% from year

2006-07. Most of the exports are dominated by the generic drugs because of the low cost advantageenjoyed by Indian companies. These exports are mainly to the developed markets like US, Europe

and Canada etc. The growth in domestic pharma industry is attributable to the rise in health care

spending of the government and increase in disposable incomes of the public.

Figure 5: Market Size

Source: Icfai Research Team.


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Future Outlook

Indias population which is over one billion is expected to rise to 1.6 billion by 2050. It isestimated that by 2025, 189 million Indians will be in the above 60 years group compared to63 million at 2007. This shows the demand for drugs will increase in future. The increasing focuson health care by central and state governments to provide adequate health facilities and improvethe quality of facilities in rural and urban areas will drive the pharma industry. In the coming fouryears, around US$ 72 billion worth of patents will come to expiry. This will open up huge marketfor the Indian generic drug companies which are cost competitive. The increasing focus onprofitability by MNCs has made them focus on drug discoveries and marketing rather than onmanufacturing. This created market for contract manufacturing. India being a low cost and highquality producer emerged as a principal destination for global pharmaceutical companies inmanufacturing drugs. This will be a growth driver in coming years. The increase in healthconsciousness among middle and upper class made them to spend substantial amount of money ondrugs to maintain good health and lifestyle.

The growing urbanization and changing life styles of the people had inclined them towards

western culture and inclination of people towards ready to eat foods exposed them to severe health

problems like obesity, cardiac diseases and respiratory problems. This results in increase in sales

of lifestyle drugs.

Indian pharmaceutical majors are altering their business strategies by placing greater focus onR&D and the discovery of new chemical entities. Traditionally, the vast majority of Indias

pharmaceutical R&D spending was concentrated on reverse engineering and the adaptation of

patented foreign drugs to the Indian market. Most of the industrys funding went to research rather

than to new drug discovery and development. Low levels of industry productivity and the

relatively small size of Indias pharmaceutical companies limited funding for R&D as they

dedicated only less than 2 percent of their annual turnover to R&D compared with between

15 percent and 20 percent allocated by Western innovator companies. After 2005, Indias leading

drug companies recognized that they could not survive as global players without significant R&D

capabilities. Since 1995, total industry R&D spending has grown from nearly $30 million to more

than $495.3 million in 2005-06. The vast majority of the industrys R&D expenditures on new

drug discovery and development are conducted by a limited number of companies, with Dr. Reddys

and Ranbaxy in the forefront. In 2005, Dr. Reddys committed 14 percent of its annual sales to

R&D, whereas, Ranbaxy allocated approximately 7 percent. Ranbaxy announced that it will

gradually increase its R&D spending to between 9 and 10 percent of sales by the end of 2007.

Others with significant R&D expenditures include Nicholas Piramal, Aurobindo Pharma, and

Glenmark Pharma. Driven by the dynamics of the market, leading foreign pharmaceutical

companies have entered into R&D agreements with Indias leading drug companies. Facing

spiraling costs and patent expiries for blockbuster drugs at home, many are looking to India as a

low-cost alternative, especially due to the large number of US. FDA-approved plants located in

India. MNCs have been attracted by Indias low costs for new drug discovery and many of these

firms have founded state-of-the-art research facilities in India. Whereas new drug discovery costs

between $100 million and $200 million in the West, the same process in India only costs

approximately $10 million. Likewise, clinical trials in India cost approximately $20 million while

the cost abroad would range between $300 million and $350 million.

India amended its patent law on March 22, 2005, abolishing its process patents law and

reintroduced Western style product patents for pharmaceuticals, food, and chemicals. This

action effectively ended 36 years of protection for Indian pharmaceutical companies and stipulated

that Indian companies selling copycat drugs must pay foreign patent holders a reasonable royalty

for copies sold in the Indian market. The amendment made reverse engineering or copying of

patented drugs illegal after January 1, 1995. The Act allowed for only two types of generic drugs

in the Indian market: off-patent generic drugs and generic versions of drugs patented before 1995.


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CIPLA LIMITED

Overview

The Chemical, Industrial & Pharmaceutical Laboratories, which is popularly known as Cipla wasset up in 1935. Cipla Laboratories is the leader in domestic retail pharmaceutical market. Cipla is

known for producing low cost anti-AIDS drugs in developing countries. The company has morethan 1,000 products in the domestic market including generic AIDS drugs, antibiotics,chemotherapy, and drugs for gastrointestinal illnesses and asthma. Its products are distributed inmore than 180 countries. The firm exports raw materials, intermediates, prescription drugs, over-the-counter products, and veterinary products. It also produces hundreds of generic drugs forinternational distributions; among them are atorvastatin, amlopidine, fluoxetine, venlafaxinehydrochloride and metformin.

Cipla is the worlds largest manufacturer of antiretroviral drugs to fight HIV/AIDS. Worldwidenearly 40% of HIV/AIDS patients undergoing antiretroviral therapy using Cipla drugs, becauseCipla produced generic drugs are much cheaper than the multinational brand name drugs.

Products and Services

Products manufactured by Cipla include prescription drugs, animal products, over-the-counter,bulk drugs, flavors and fragrances and agrochemicals. It also offers a range of technology servicesfor products and processes. Technical know-how/fees received during the year 2006-07 amountedto Rs.764.70 million.

Cipla operates in both domestic and export segments. Cipla products are bought by over 180countries located in USA, Europe, Middle East, Asia, Africa, South America and Australia.Exports for the financial year ended March 31, 2007 amounted to more than Rs.17,800 million.

Basic Revenue ModelIndustrys value chain gets reflected in Ciplas revenue model. It has a presence in entire value

chain of pharma industry. Ciplas businesses are broadly divided into the following segments:

1. Formulations

2. Active Pharmaceutical Ingredient (API) or Bulk Drugs

3. Technology Services.

Formulations

Cipla is a leading manufacturer of formulations in the country. Cipla manufactures and markets

wide range of products covering a large number of therapeutic segments like anti-asthmatics, anti-

biotics, anti-cancer, and anti-inflammatory, analegics, anti-depressant, etc. This segment is further

divided into prescription drugs and Over-the-Counter (OTC) products. The OTC product range

covers therapeutic areas such as child care, cough, cold and flu, eye care, life style products, health

drinks, pain care, vitamins and minerals, etc.

Bulk Drugs

This segment can be further divided into Active Pharmaceutical Ingredients and Drug

Intermediates.

Technology Services

Cipla also offers a range of technology services like consulting, project appraisal, engineering,

plant supply, commissioning, training, operational management, support, know-how transfer and

quality control. The revenue received from these segments is mainly in the form of royalty,

technology know-how fees and licensing income.


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Figure 6: Revenue Model

Source: Cipla Annual Report.

Key Strategies Followed by Cipla

Strategic Alliances

Company sources stated that Cipla was conscious of the present competition arising due to recent

dynamic happenings. In order to sustain in the highly competitive global market the company has

entered into many strategic alliances across the globe to market it products. In US, Cipla has

alliances with nine generic majors including Teva Pharmaceuticals USA, Inc., Watson

Pharmaceuticals, Inc., Eon Labs, Inc. and Akorn, Inc. for over 125 projects. Similar alliances existin Europe, South Africa, Australia and the Middle East. In other international markets, Cipla has

exclusive marketing tie-ups with companies which are well versed with the local market. This

strategy has been the key factor for Ciplas exponential growth in the export segment.

Expanding Capacities

The company is in the process of expanding its capacity by building new units at Bangalore and

Kurkumbh for the manufacture of APIs, and at Sikkim for formulations.

Development of Innovative Drug Delivery Systems

Development of innovative drug delivery systems for new and existing active drug substancescontinued to be an integral part of the Companys growth strategy.

Financial PerformanceThe company is adopting various innovative energy conservation measures to curtail the

proportionate increase in total energy usage consequent to overall increase in production. This may

help to maintain cost of production at optimum levels. Some of the specific measures undertaken are:

i. The Company has installed and commissioned variable frequency drives for water pumps

leading to reduction in power usage.


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ii. The Company has installed flash steam vessels at Goa to collect steam from boiler and reuse

for increasing boiler feed water temperature, leading to savings in fuel consumption.

iii. The Company has carried out modifications in the piping design of chilled water systems and

pumping systems resulting in substantial savings in energy consumption due to improved

operational efficiency.

iv. Building Monitoring Systems has been extended to other plants in Goa and in Patalganga to

monitor and control service floors, which has lead to a significant savings in power usage.

For the financial year 2006-2007, Ciplas turnover was at Rs.34.38 billions with a growth rate of

19% over the previous year. Over the past three years, the company has shown sales CAGR of

23% out pacing the industrys growth rate of 13%. Companys net profit stood at Rs.6.68 billions

for the year FY 2007. Companys net profit margin is at 19%. It has slightly decreased from the

previous year mainly because of higher raw material cost and change in product mix. The

company has adopted various innovative energy conservation measures to curtail the proportionate

increase in total energy usage consequent to overall increase in production. This has helped the

company to decrease the manufacturing expenses. Raw materials have increased from 49% of net

sales in FY 06 to 50% in FY 07 because of increase in raw material prices. Companys financial

charges had decreased to Rs.69.5millions mainly because of repayment of debt in FY 2007. Cipla

has incurred a capital expenditure of Rs.4.2billions for the year FY 2007 to develop the new

manufacturing facilities in Patalaganga and Bangalore.

Segmental Analysis

Export Segment Major Thrust

The Company is witnessing a rising trend in exports. For the year 2006-07, exports have

accounted for over 50 percent of the overall sales. The overseas sales reached 17807.4 millions in

2006-07 from 15182.4, recording a 17% growth this year. Overseas business is a major thrust area

for the future growth of the company. The Company has undertaken a rapid expansion of facilities

for the manufacture of APIs and formulation dosage forms. Cipla is in the process of setting up

SEZ projects for the manufacture of formulations in Indore. In addition, the company is expected

to commence commercial manufacturing at Kurkumbh and Bangalore in the year 2008. Cipla

exports to 180 countries across all the continents the US, Latin America, Europe, Australia,

Africa and Asia. The highest contribution to overseas revenue is contributed by North, South, and

Central America with 33%, followed by Africa with 23% and the least is contributed by Middle

East with 7%.

Figure 7: Geographical Segmentation of Revenues

Source: Cipla Annual Report.


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Domestic Markets The Leaders

In the domestic arena, Cipla continued to maintain its leadership position. The sales have seen an

increase of 17 percent. The focus was not only on consolidating its existing brands but also on

introducing new products and dosage forms. The Company is aiming to increase its penetration

and coverage for increasing its market share further.

Future Outlook

Cipla has launched many novel drugs and formulations like Ciclohale, SimplyOne, Calcinase,

Neosurf, Viraday, etc. Some of the introduced formulations have the unique distinction of being

the first products of their kind in the world.

Ciplas growth will also be powered by positive growth in the existing portfolio, due to

development of innovative drug delivery systems.

Ciplas international business performance, over the past few years, has witnessed tremendous

growth. Exports have contributed for over 50 percent of the overall sales of the company and

exports exceeded Rs.17,500 millions. Cipla exports to 180 countries across all the continents the

U.S., Latin America, Europe, Australia, Africa and Asia. Exports will continue to be a thrust area,

in the future, for the company. Rupee appreciation may be a concern to the company as 50% of

sales are coming from the exports but will not influence in volume terms because of huge cost

margin enjoyed by the companys products. Rupee appreciation may be a concern in terms of

revenue realization and this may affect the bottom line of the company in the coming years.

The companys R&D department is making continues efforts to improve processes and enhance

productivity in both APIs and formulations. An improved process may help the company to reduce

wastage and optimize consumption.

Cipla is concentrating more on development and patenting of new molecular forms and methods of

synthesis and development of new drug delivery systems. It expects to achieve improvement in the

following areas:

i. Improvement in operational efficiency through reduction in batch hours, increase in batch

sizes, better solvent recovery and simplification of processes.

ii. Meeting norms of external regulatory agencies to facilitate more exports.

iii. Improvements in effluent treatment, pollution control and all-round safety standards.

iv. Maximum utilization of indigenous raw materials.

v. Development of products for import substitution.

With growing trends of foreign competition and takeovers it remaines to be seen whether Cipla

would maintain its position as a key generic player in the global pharma industry.


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ANNEXURE I

Additional Information

Sales: In FY 08 Company will commence commercial manufacture at its new Patalganga ExportOriented Unit (EOU), set up with an investment exceeding Rs.1,700 millions. New projects are

also underway at Bangalore and Kurkumbh for the manufacture of APIs, and at Sikkim forformulations. The overall capital expenditure for the year FY 07 amounted to nearly Rs.4,200millions crore. Considering this increase in capacity sales are assumed to grow at 19%, 18%, and16% for the FY 08 FY 09 and FY 10 respectively.

Excise Duty: Excise duty is considered to remain constant, i.e., 2% of gross sales for the FY 08-09and FY 09-10.

Raw Material: Because of operational efficiency measures taken by the company raw materialcost are expected to decreases to 46% in the year FY 08 and further decrease by 2%, i.e. to 44%for the FY 09 and FY 10.

Staff Cost: In past, the company has staff cost at around five percent of sales. The staff costs willincrease to 6% for the future three years (FY 08, FY 09 and FY 10).

Other Expenses: In past, the company has other expenses at around 24 percent of sales, it willincrease to 26 percent. It will maintain the same for the future.

Depreciation Charges: depreciation at 25% of the gross asset for the FY 08, 09 and 10.

Tax: The effective tax rate for the company will remain at 16% level.

Dividend Paid: The Company to pay a dividend of Rs.2 per share for the FY 08 and Rs.3.50 forthe FY 09 and FY 10.

Gross Assets: For calculating gross fixed assets we considered projects under implementation andalso projects that are in the planning stage. As on March 31st 2007, the projects underway were anExport Oriented Unit (EOU) at Patalganga, with a cost exceeding Rs.1,700 millons, projects atBangalore and Kurkumbh for the manufacture of APIs, and at Sikkim for formulations. In the nextcoming years, the gross fixed asset turnover ratio will remain at 1.9.

Investments: Investments are assumed to decrease by 84% in FY 08 to fund the expenditureincurred due to the new projects. It has then been increased to around Rs.668 mn in FY 09 and

to Rs.700 mn in FY 10.

Inventory: Inventory turnover ratio will remain at 3.12 in next coming year.

Trade Debtors: Trade debtors turnover ratio will remain at 4.

Loans and Advances: Loans and advances generally represent loans and advances given toemployees, loans to its subsidiaries and other advances. Loans and advances turnover ratio willremain constant at 6.6 for the years FY 08, 09 and 10.

Other Current: Other current assets will remain at 0.57% of sales for the next coming years.

Current Liabilities and Provisions: Current liabilities and Provisions turnover ratio will remainat 5.3,9.2 respectively for the next coming years.

Debt-Equity Ratio: Debt-Equity ratio will remain at 0.02 for the next coming years.

Growth Rate: Growth rate of 15% will decline from the year FY 2010 to 6% for the yearFY 2017. While the continuing growth rate will be at 5%.

Number of shared outstanding: Rs.777.3 millions.

Source: Icfai Research Team.


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ANNEXURE II

Profit & Loss A/c of Cipla FY 05-FY 07

(Rs. in Million)

Particulars 2004-05 2005-06 2006-07

Net Sales 23364.98 28913.60 34382.40

% Growth 27% 24% 19%

Total Revenue 24917.36 31075.10 36687.90

% Growth 27% 25% 18%

Expenditures

Raw Materials, Traded Goods, (increase) orDecrease of goods 10946.88 14115.70 17255.80

% Of Net Sales 47% 49% 50%

Employee Cost 1165.77 1507.60 1845.90

% Of Net Sales 5% 5% 5%

Manufacturing Expenses 1303.08 1595.90 1733.20

% Of Net Sales 6% 6% 5%

Other Expenses 4176.31 5902.00 6670.00

% Of Net Sales 18% 20% 19%

Total Expenditures 17592.04 23121.20 27504.90

% Of Net Sales 75% 80% 80%

EBITDA 5772.94 5792.40 6877.50

EBITDA Margin % 25% 20% 20%

Growth % 71% 0% 19%

Depreciation & Amortization 550.47 801.80 1033.70

EBIT 5222.47 4990.60 5843.80

Financial Charges 76.33 114.20 69.50

Other Income 1552.38 2161.50 2305.50

PBT 6698.52 7037.90 8079.80

Pre-tax Margin % 28.67% 24.34% 23.50%

Tax 1050.00 1022.00 1399.50

Effective Tax Rate % 16% 15% 17%

Adjusted PAT 5648.52 6015.90 6680.30

Net Profit Margin % 24% 21% 19%

Growth % 79% 7% 11%

Extraordinary Income 0.00 0.00 0.00

Reported PAT 5648.52 6015.90 6680.30

Shares in Issue- at face value of Rs.2/share 299.87 299.87 777.30

Adjusted EPS 18.84 20.06 8.59

Dividend Paid per Share 3.5 2 2

Pay-out Ratio 19% 10% 23%

PAT after dividend Payment 4598.98 5416.16 5125.70

Dividend paid 1049.55 599.74 1554.60

Source: Cipla Annual Reports, Icfai Research Team.


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ANNEXURE III

Balance Sheet of Cipla FY 05-FY 07

(Rs. in Million)

Particulars 2004-05 2005-06 2006-07

Gross Asset 10926.31 14536.80 18729.00

Accumulated Depreciation 2,477.57 3100.6 4,116.40

Net Fixed Asset 8,448.74 11,436.20 14,612.60

Investments 183.02 224.30 1178.00

Current Asset 17528.89 22922.90 28346.80

Cash & Bank Balance 153.80 444.8 1314.90

Inventories 7456.79 9570.00 9786.00

Trade Debtors 5873.23 8759.60 10287.80

Loans and Advances 3909.90 4015.00 6709.80

Other Current Assets 135.17 133.50 248.30

Current Liabilities & Provisions 7784.39 9082.10 9412.60

Current Liabilities 4944.54 6358.90 5311.30

Provision 2839.85 2723.10 4101.30

Net Current Asset Excluding Cash 9590.70 13396.00 17619.30

Miscellaneous Items 0.00 0.00 0.00

Capital Deployed 18376.26 25501.30 34724.80

Total Assets 26160.65 34583.40 44137.40

Deferred Tax liabilities 889.46 979.5 1126.5

Non-Current Liabilities

Secured Debt 403.73 512.7 72.5

Non-secured Debt 1546.69 4176.4 1163.1

Total Liabilities 1950.42 4689.1 1235.6

Share Capital 599.70 599.7 1554.6

Reserve and Surplus 14936.64 19233 30808.1

Total Stock Holders Equity 15,536.34 19,832.70 32,362.70

Capital Employed 18,376.22 25,501.30 34,724.80Source: Cipla Annual Report, Icfai Research Team.


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ANNEXURE IV

Cash Flow Statement of Cipla FY 05-FY 07

(Rs. in Million)

Particulars FY 05 FY 06 FY 07

PBT 6698.52 7098.40 10385.30

Depreciation 550.47 801.80 1033.70

Interest Expense 76.33 114.20 69.50

Others (2163.89) 91.10 (3408.70)

Operating Profit Before WC Changes 5161.43 8105.50 8079.80

Changes in Current Assets 3166.59 5394.01 5423.90

Changes in Current Liabilities 988.50 1297.71 330.50

Changes in WC 2178.09 4096.30 5093.40

Others 138.10 110.70 1292.30

Cash Generated from Operations 3121.44 4119.90 4278.70

Total Taxes Paid 1050.00 1022.00 1399.50

Others Tax/(refund) 2171.37 2370.30 2333.90

Net Cash Generated from Operations 2000.07 2771.60 3344.30

Cash Flow from Investing Activities

CAPEX 2958.29 3610.49 4192.20

Investments (1620.67) 41.28 953.70

Other Income 1552.38 2161.50 2305.50

Others (6794.06) (9623.01) (10403.70)Net Cash Used in Investing Activities (662.72) (3892.30) (4859.70)

Cash Flow from Financing Activities

Change in Debt (155.42) 2738.68 (3453.50)

Change in Equity 0.00 0.00 954.90

Dividends Paid 1049.55 599.74 1554.60

Interest Paid 76.33 114.20 69.50

Others 35.31 (571.24) 6508.30

Net Cash used in Financing Activities (1245.99) 1453.50 2385.60

Net Increase in Cash and Cash Equivalents 91.36 332.80 870.20Cash and Cash Equivalents at the Beginning 62.44 153.80 444.80

Net Increase in Cash and Cash Equivalents 91.36 332.80 870.20

Cash and Cash Equivalents at the End 153.80 486.60 1315.00

Source: Cipla Annual Reports, Icfai Research Team.


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ANNEXURE V

Historical Monthly Closing Price of Cipla and Index Sensex

(Rs. in Million)

Month Cipla (Rs.)

No. of Shares

Issued (in million) Market Cap (Rs.) BSE

Jan-06 441.3 299.87 132,332.63 9919.89

Feb-06 551.9 299.87 165,498.25 10370.24

Mar-06 661.95 299.87 198,498.95 11279.96

Apr-06 260.8 299.87 78,206.10 12042.56

May-06 229.5 299.87 68,820.17 10398.61

Jun-06 215.8 299.87 64,711.95 10609.25

Jul-06 236 299.87 70,769.32 10743.88

Aug-06 249.95 299.87 74,952.51 11699.05

Sep-06 262.25 299.87 78,640.91 12454.42Oct-06 262.05 299.87 78,580.93 12961.90

Nov-06 253.85 299.87 76,122.00 13696.31

Dec-06 250.70 299.87 75,177.41 13786.91

Jan-07 245.80 299.87 73,708.05 14090.92

Feb-07 233.30 299.87 69,959.67 13938.09

Mar-07 235.70 299.87 70,679.36 13072.10

Apr-07 210.85 777.30 163,893.71 13872.37

May-07 217.65 777.30 169,179.35 14544.46

Jun-07 208.45 777.30 162,028.19 14650.50

Jul-07 190.7 777.30 148,231.11 15550.99

Aug-07 167.35 777.30 130,081.16 15318.60

Sep-07 182.4 777.30 141,779.52 17291.10

Oct-07 178.75 777.30 138,942.38 19837.19

Nov-07 183.45 777.30 142,595.69 19363.10

Dec-07 212.6 777.30 165,253.98 20286.99

Jan-08 188.45 777.30 146,482.19 17648.70

Feb-08 207.25 777.30 161,095.43 17578.72

Mar-08 219.75 777.30 170,811.68 15644.44

Source: www.bseindia.com


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References

1. www.pharmabiz.com

2. www.cipla.com

3. CMIE

4. www.bseindia.com

5. www.pharmaceutical-drug-manufacturers.com

6. www.equitymaster.com

7. www.nseindia.com

8. www.ranbaxy.com

9. www.businessline.in

10. www.economitimes.com

04 Cipla Limited

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