FUNDAMENTAL

ANALYSIS ON

PHARMACEUTICAL SECTOR

GROUP MEMBERS

NAME ROLL NO

NUPUR KOTHARI 23

NISHITA SOLANKI 44

GAURAV BAID 04

PRIYANKA SHAH 36

AARTI DUBEY 11

SONALI JAJOO 19

FUNDAMENTAL ANALYSIS

Fundamental analysis of a business involves analyzing its financial statements and health, its management and competitive advantages, and its competitors and markets. When applied to futures and forex, it focuses on the overall state of the economy, interest rates, production, earnings, and management. When analyzing a stock, futures contract, or currency using fundamental analysis there are two basic approaches one can use; bottom up analysis and top down analysis.[1] The term is used to distinguish such analysis from other types of investment analysis, such as quantitative analysis and technical analysis.

Fundamental analysis is performed on historical and present data, but with the goal of making financial forecasts. There are several possible objectives:

to conduct a company stock valuation and predict its probable price evolution, to make a projection on its business performance, to evaluate its management and make internal business decisions, to calculate its credit risk.

Investors can use any or all of these different but somewhat complementary methods for stock picking. For example many fundamental investors use technicals for deciding entry and exit points. Many technical investors use fundamentals to limit their universe of possible stock to 'good' companies.

The choice of stock analysis is determined by the investor's belief in the different paradigms for "how the stock market works". See the discussions at efficient-market hypothesis, random walk hypothesis, capital asset pricing model, Fed model Theory of Equity Valuation, market-based valuation, and behavioral finance.

Fundamental analysis includes:

1. Economic analysis2. Industry analysis3. Company analysis

On the basis of these three analyses the intrinsic value of the shares are determined. This is considered as the true value of the share. If the intrinsic value is higher than the market price it is recommended to buy the share . If it is equal to market price hold the share and if it is less than the market price sell the shares.

Fundamentals: Quantitative and Qualitative 

You could define fundamental analysis as "researching the fundamentals", but that doesn't tell you a whole lot unless you know what fundamentals are. As we mentioned in the introduction, the big problem with defining fundamentals is that it can include

anything related to the economic well-being of a company. Obvious items include things like revenue and profit, but fundamentals also include everything from a company's market share to the quality of its management. 

The various fundamental factors can be grouped into two categories: quantitative and qualitative. The financial meaning of these terms isn't all that different from their regular definitions. Here is how the MSN Encarta dictionary defines the terms: 

Quantitative – capable of being measured or expressed in numerical terms. Qualitative – related to or based on the quality or character of something, often

as opposed to its size or quantity.

In our context, quantitative fundamentals are numeric, measurable characteristics about a business. It's easy to see how the biggest source of quantitative data is the financial statements. You can measure revenue, profit, assets and more with great precision. 

Turning to qualitative fundamentals, these are the less tangible factors surrounding a business - things such as the quality of a company's board members and key executives, its brand-name recognition, patents or proprietary technology. 

Quantitative Meets Qualitative 

Neither qualitative nor quantitative analysis is inherently better than the other. Instead, many analysts consider qualitative factors in conjunction with the hard, quantitative factors. Take the Coca-Cola Company, for example. When examining its stock, an analyst might look at the stock's annual dividend payout, earnings per share, P/E ratio and many other quantitative factors. However, no analysis of Coca-Cola would be complete without taking into account its brand recognition. Anybody can start a company that sells sugar and water, but few companies on earth are recognized by billions of people. It's tough to put your finger on exactly what the Coke brand is worth, but you can be sure that it's an essential ingredient contributing to the company's ongoing success. 

The Concept of Intrinsic Value 

Before we get any further, we have to address the subject of intrinsic value. One of the primary assumptions of fundamental analysis is that the price on the stock market does not fully reflect a stock's "real" value. After all, why would you be doing price

analysis if the stock market were always correct? In financial jargon, this true value is known as the intrinsic value. 

For example, let's say that a company's stock was trading at $20. After doing extensive homework on the company, you determine that it really is worth $25. In other words, you determine the intrinsic value of the firm to be $25. This is clearly relevant because an investor wants to buy stocks that are trading at prices significantly below their estimated intrinsic value. 

This leads us to one of the second major assumptions of fundamental analysis: in the long run, the stock market will reflect the fundamentals. There is no point in buying a stock based on intrinsic value if the price never reflected that value. Nobody knows how long "the long run" really is. It could be days or years. 

This is what fundamental analysis is all about. By focusing on a particular business, an investor can estimate the intrinsic value of a firm and thus find opportunities where he or she can buy at a discount. If all goes well, the investment will pay off over time as the market catches up to the fundamentals.

ECONOMY CONTRIBUTION IN PHARMACEUTICAL SECTOR

Although global economic recovery still remains fragile and the road back to normalcy is a long and difficult one, the fortunes of India’s pharmaceutical industry remain upbeat. Whereas the financial year gone by has been a dismal one for companies in most sectors, domestic pharmaceutical companies have not only bucked the trend but have seen huge growth in their market capitalisation. In 2012-13, the BSE Healthcare Index returned 21 per cent compared to the modest 8 per cent rise in the Sensex, and the stocks of 6 of the top 10 pharmaceutical companies (by market cap) outperformed the broader index.

This strong performance was underpinned by an amalgam of strong exports to the U.S. and the depreciation of the rupee against the dollar. In fact, the growth story of the industry is a more long-term phenomenon; it has grown consistently at a compounded annual growth rate (CAGR) in excess of 15 per cent over the last five years. This robust growth not only indicates the industry’s inherent strengths in the global landscape, but is also a reflection of improving healthcare standards in the country. The constant demand for reduction in manufacturing costs globally has

presented Indian companies with ample growth opportunities, specifically in developed markets.

Exports have been the cornerstone of growth of the Indian pharma industry, with the global pharmaceuticals market offering strong opportunities to Indian players. This upbeat trend in formulation exports is expected to continue in future too, with 14-16 per cent CAGR envisaged between 2012-13 and 2017-18. Over the next five years, drugs with sales of more than $100 billion are expected to lose patent exclusivity and open up to generic competition. Healthcare expenditure is also spiralling the world over, and the steepest rise is seen in the developed markets of the U.S. and Europe, which traditionally contribute the largest share to global medicine sales. With India’s key strengths of cost-competitiveness and advanced process chemistry skills, Indian players are well-placed to tap into this opportunity and increase their presence in the generics market.

DOMESTIC BUSINESS

Although exports will continue to be the focus for most Indian players, growth will also be supported by the domestic business. Domestic formulations sales are set to grow at a CAGR of 13-15 per cent between 2012-13 and 2017-18, crossing Rs.1 lakh crore in market size. An increase in launches of drugs for lifestyle-related ailments is expected to drive this growth. Changing lifestyles of the working population, higher stress levels and unhealthy eating habits will continue to lead to a higher incidence of lifestyle-related ailments such as diabetes, obesity and cardiovascular diseases, especially in urban areas, fuelling the sales for drugs catering to these segments.

Within acute therapy segments, sales of gynaecology and dermatology drugs will grow the fastest over the next five years. We believe that the anti-infectives segment will continue to occupy a major share in the total domestic market and estimate that it will grow by 10-12 per cent over the next five years. Poor hygiene and sanitary conditions in India are likely to keep the demand for anti-infectives steady, while rural penetration will supplement the growth in sales volumes. Despite strong volume growth, there could be certain challenges on the pricing front. In the domestic market, the National Pharmaceutical Pricing Policy would limit growth in sales and profitability of pharmaceutical companies. But this will only be a small blip in the otherwise buoyant long-term growth trajectory of Indian pharma.

Role of Pharmaceutical Industry in India GDP-Facts

The Pharmaceutical Industry in India is one of the largest in the world It ranks 4th in the world, pertaining to the volume of sales The estimated worth of the Indian Pharmaceutical Industry is US$ 6 billion The growth rate of the industry is 13% per year Almost most 70% of the domestic demand for bulk drugs is catered by the

Indian Pharma Industry The Pharma Industry in India produces around 20% to 24% of the global

generic drugs The Indian Pharmaceutical Industry is one of the biggest producers of the

active pharmaceutical ingredients (API) in the international arena The Indian Pharma sector leads the science-based industries in the country The pharmaceutical sector has the capacity and technology pertaining to

complex drug manufacturing Around 40% of the total pharmaceutical produce is exported 55% of the total exports constitute of formulations and the other 45%

comprises of bulk drugs The Indian Pharma Industry includes small scaled, medium scaled, large

scaled players, which totals nearly 300 different companies There are several other small units operating in the domestic sector

Pharmaceutical Industry in India-Growth

As per the present growth rate, the Indian Pharma Industry is expected to be a US$ 20 billion industry by the year 2015

The Indian Pharmaceutical sector is also expected to be among the top ten Pharma based markets in the world in the next ten years

The national Pharma market would experience the rise in the sales of the patent drugs

The sales of the Indian Pharma Industry would worth US$ 43 billion within the next decade

With the increase in the medical infrastructure, the health services would be transformed and it would help the growth of the Pharma industry further

With the large concentration of multi national pharmaceutical companies in India, it becomes easier to attract foreign direct investments

The Pharma industry in India is one of the major foreign direct investments encouraging sectors

Role of Pharmaceutical Industry in India GD-India Advantage

India has the advantage of the cost, as the cost of labor, the cost of inventory is much lower than other places

The multinational companies, investing in research and development in India may save upto 30% to 50% of the expenses incurred

The cost of hiring a research chemist in the US is five times higher than its Indian counterpart

The manufacturing cost of pharmaceutical products in India is nearly half of the cost incurred in US

The cost of performing clinical trials in India is one tenth of the cost incurred in US

The cost of performing research in India is one eighth of the cost incurred in US

EXCISE DUTY

The central excise duty on drugs is 6 per cent, and value added tax is 4-5 per cent. The customs duty on formulations is 10 per cent (other than specified drugs, life saving drugs, vaccines and bulk drugs where it is 5 per cent).

OPPI has recommended that the customs duty be rationalised to 5 per cent, and that customs duty for health supplements be reduced to 10 per cent from 30 per cent and the additional customs duty of 12 per cent be reduced to 10 per cent.

Manish Doshi, President, India Drug Manufacturers’ Association (IDMA) and Managing Director, Umedica Labs, told The Hindu, that “the taxes and duties across the value chain must be brought down. The government has been working to keep medicine prices low and affordable but considering the demand, the rates must be rationalised.”

Some therapeutic categories such as anti-cancer or transplant drugs could cost several thousand rupees a month, and, according to Mr. Doshi, “the government must ensure that the patient gets the best at affordable rates.’’

RESEARCH & DEVELOPMENT NEEDS A BOOST

In the present form, the only tax benefit available for research and development (R&D) activities is in the form of weighted deduction for in-house R&D.

It is felt that R&D activity along with contract manufacturing could go a long way to help the Indian pharma sector grow. D. G. Shah, Secretary General, Indian Pharmaceutical Alliance (IPA), felt that pharma R&D was different from R&D in all other sectors. “It takes a minimum of 10-12 years to arrive at an outcome. It requires sustained effort and funding. Pharma R&D however, continues to be treated on a par with R&D in sectors such as automobiles or information technology. Pharma units engaged in R&D should get incentives to give a boost to this activity

TOP 20 PHARMACEUTICALS COMPANIES IN INDIA:

1. Ranbaxy:

2. Dr. Reddy's Laboratories:

3. Cipla:

4. Sun Pharma Industries

5. Lupin Labs 

6. Aurobindo Pharma 

7. Glaxo SmithKine Pharmaceuticals ltd. 

8. Cadila Healthcare 

9. Aventis Pharma 

10. Ipca Laboratories

11. Dabur

12. Jubilant Life Sciences

13. Piramal Healthcare

14. Wockhardt

15. Torrent Pharmaceuticals

16. Sterling Bio Pharma.

17. Aventis Pharma.

18. Glenmark Pharmaceuticals

19. Biocon

20. Alembic

Ranbaxy Laboratories Limited

Date of Establishment 1961

Revenue 1151.28 ( USD in Millions )

Market Cap 168490.1704838 ( Rs. in Millions )

Corporate Address A-41, Industrial Area Phase V I I I - A,Sahibzada Ajit Singh Nagar, Mohali-160071, Punjab

www.ranbaxy.com

Management Details Chairperson - Tsutomu Une 

MD - Arun Sawhney

Directors - Akihiro Watanabe, Anthony H Wild, Arun Sawhney, Atul Sobti, Kazunori Hirokawa, Percy K Shroff, Rajesh V Shah, S K Patawari, Sunil Godhwani, Sushil K Patawari, Takashi Shoda, Tsutomu Une

Business Operation Pharmaceuticals & Drugs

Background Ranbaxy Laboratories, is India's largest pharmaceutical company incorporated in 1961. The company has a global footprint in 46 countries, world-class manufacturing facilities in 7 countries and serves customers in over 125 countries.  Ranbaxy has world-class manufacturing facilities in 11 countries namely Brazil, China, Ireland, India, Japan, Malaysia, Nigeria, Romania, South Africa, USA and

Vietnam.

Financials Total Income - Rs. 65607.07 Million ( year ending Dec 2012) 

Net Profit - Rs. -1623.39 Million ( year ending Dec 2012)

Company Secretary Sushil K Patawari

Bankers ABN Amro Bank, Citi Bank, Deutsche Bank, HSBC Bank, Punjab National Bank,Standard Chartered Bank

Auditors Walker, Chandiok & Co

COMPANY HISTORY

Ranbaxy Laboratories, is India's largest pharmaceutical company incorporated in 1961. The company has a global footprint in 46 countries, world-class manufacturing facilities in 7 countries and serves customers in over 125 countries.  Ranbaxy has world-class manufacturing facilities in 11 countries namely Brazil, China, Ireland, India, Japan, Malaysia, Nigeria, Romania, South Africa, USA and Vietnam.

Ranbaxy has its R & D centre that helps company to have long term competitive advantage. It caters treatment to segment of diseases that includes Cardiovascular, Central Nervous System, Respiratory, Dermatology, Orthopedics, Nutritionals and Urology.

Ranbaxy's top 20 products, ranging from Anti-infectives to Dermatological, account for revenues of over $600 Million. Using the finest R&D and Manufacturing facilities, that manufactures and markets generic pharmaceuticals, value added generic pharmaceuticals, branded generics, Active Pharmaceuticals and intermediates (API).

With workforce of over 12,000 spread across 50 nations, it pursues to become Global leader in pharma sector.

In 2001 Ranbaxy entered consumer healthcare through launch of 4 brands Revital, Pepfiz, Gesdyp & Garlic Pearls.

In 2004 launched its first herbal range of products through New Age Herbals (NAH), with products offering remedies in categories of Cough & Cold (Olesan Oil & Cough Syrups) and Appetite Stimulant (Eat Ease).

In 2005, another popular brand, Chericof - The complete cough formula was introduced. During 2006, the business registered sales of $19 Million registering a growth of 19%. Revital, the flagship brand continues to maintain leadership in its segment.

It also produces molecules like Simvastatin, Ciprofloxacin, Amoxycillin, Isotretinon and many more

MILESTONE ACHIEVED

2010 - Ranbaxy enters the Golden jublee year

• 2010- For the first time Ranbaxy delivered quarterly sales of over $500 million

• 2009- Dailchi Sankyo and Ranbaxy announced reconstitution of Ranbaxy executive leadership. Ranbaxy was acquired by Daiichi Sankyo through acquisition of it 52.5% of the equity share capital.

• 2008- Ranbaxy partnered with Daiichi Sankyo Company to create a strategic combination of an innovator and generic powerhouse

• 2007- Ranbaxy has signed new R&D agreement with GSK

• 2006-Ranbaxy acquires generic unbranded business of GSK in Italy & Spain

• 2006 -Ranbaxy acquires Terapia largest independent generic pharma company in Romania for $ 324 million

• 2003 Ranbaxy receives The Economic Times award for corporate excellence for ‘The Company of the year’2002-03

• 2000 Ranbaxy acquires Bayers generic business in Germany. It has alliance with Glaxo SmithKline for Drug discovery & clinical development

PRODUCT

Product NameYea

rMonth

Sales Quantity

Sales Value(Rs.Million

)% of STO

Tablets 2012 12 0.00 19096.68 30.16

Active Pharmaceuticals Ingredients &

2012 12 0.00 14025.74 22.15

Tablets - Traded 2012 12 0.00 6483.17 10.24

Capsules 2012 12 0.00 5383.11 8.50

Active Pharmaceuticals Ingredients & Drugs Intermediates - Traded

2012 12 0.00 3318.94 5.24

Others 2012 12 0.00 3046.44 4.81

Vials 2012 12 0.00 2855.43 4.51

Vials - Traded 2012 12 0.00 1665.29 2.63

Ointments - Traded

2012 12 0.00 1564.15 2.47

Others - Traded 2012 12 0.00 1452.76 2.29

Ointments 2012 12 0.00 1265.69 2.00

Capsules - 2012 12 0.00 967.03 1.53

Traded

Other Operating Revenues - Export Incentives

2012 12 0.00 837.95 1.32

Other Operating Revenues - Royalty, Milestone, Tech

2012 12 0.00 538.18 0.85

2012 12 0.00 210.00 0.33

COMPETITORS

CompanySales

(Rs.Millon)

Current

Price

Change (%)

P/E Ratio

MarketCap.

(Rs.Million)

52-WeekHigh/Lo

w

Sun Pharma Inds.

40155.60 550.00 0.47206.3

01133755.12 581/321

Dr Reddys Lab 84340.002204.0

5-1.59 33.04 380902.46

2401/1617

Lupin 71225.10 848.00 1.10 28.59 375623.08 908/540

Cipla 82024.20 420.00 -0.85 21.51 340117.49 435/348

Glaxosmithkline Phar

26756.962291.3

50.73 33.52 192686.66

2899/1931

Ranbaxy Labs. 63035.44 395.45 -0.69 0.00 168490.17 578/254

Piramal Enterprises

14031.90 585.45 -0.18 0.00 150528.73 625/395

Glenmark 20253.78 534.60 -2.24 32.99 148163.24 612/387

Pharma

Cadila Healthcare

31508.00 682.00 0.86 21.18 138450.95 964/670

DiviS Lab 21288.901000.0

00.02 21.45 132707.74 1233/905

Ipca Laboratories

27712.40 671.00 2.49 22.94 82622.56 708/389

Torrent Pharma

27662.30 428.00 1.18 11.68 71579.46 465/315

Biocon 19380.00 342.00 -0.68 23.48 68870.00 351/240

Sanofi India 15730.402485.0

0-0.80 30.11 57694.01

2899/2060

Aurobindo Pharma

54251.00 190.00 1.60 7.90 54456.51 205/102

Strides Arcolab

7120.07 762.00 -7.41 35.30 48639.40 1225/553

Wockhardt 24711.80 440.25 5.00 7.57 45948.32 2166/344

Matrix Laboratories

28529.70 209.35 0.00 7.03 32729.53 211/209

Pfizer 10954.421056.1

00.23 14.17 31442.43 1361/985

Alembic Pharma

14926.38 157.75 -1.90 16.87 30313.36 168/60

Abbott India 16526.891365.6

50.34 19.37 28921.36

1650/1306

Sun Pharma Adv. Res

872.79 117.95 1.16 516.85 27599.74 174/69

Ajanta Pharma 8392.00 899.50 1.35 18.23 20798.67 1177/353

Fresenius Kabi Oncol

5963.00 125.00 -0.68 25.16 19912.95 154/79

Natco Pharma 4319.99 615.05 1.00 24.45 19104.63 640/342

Astrazeneca Pharma I

3889.92 885.75 20.00 0.00 18453.75 1944/595

FDC 7645.95 86.35 -0.17 9.57 15393.02 106/83

Wyeth 5940.66 619.90 0.29 12.39 14043.27 1044/610

Jubilant LifeScience

31463.03 89.50 2.70 0.00 13881.35 248/75

BSE : 500359 | NSE : RANBAXYEQ | ISIN : INE015A01028

BSE : 379.40 -14.05 (-3.57%)

NSE : 379.60 -13.25 (-3.37%)

BALANCE SHEET

………..Rs. cr…………..

Dec '12 Dec '11 Dec '10 Dec '09 Dec '08

Sources Of Funds

Total Share Capital 211.46 211.00 210.52 210.21 210.19

Equity Share Capital 211.46 211.00 210.52 210.21 210.19

Share Application Money 1.11 0.67 6.60 175.85 175.66

Preference Share Capital 0.00 0.00 0.00 0.00 0.00

Reserves 1,709.51 1,713.16 4,915.28 3,748.54 3,330.92

Revaluation Reserves 0.00 0.00 0.00 0.00 0.00

Net worth 1,922.08 1,924.83 5,132.40 4,134.60 3,716.77

Secured Loans 944.18 229.59 195.39 175.83 162.07

Unsecured Loans 3,819.43 4,103.94 4,065.33 3,172.55 3,563.30

Total Debt 4,763.61 4,333.53 4,260.72 3,348.38 3,725.37

Total Liabilities 6,685.69 6,258.36 9,393.12 7,482.98 7,442.14

Application Of Funds

Gross Block 3,118.22 3,094.07 2,857.63 2,620.92 2,386.75

Less: Accum. Depreciation 1,124.69 1,222.07 1,145.52 1,027.52 930.07

Net Block 1,993.53 1,872.00 1,712.11 1,593.40 1,456.68

Capital Work in Progress 159.60 222.62 330.18 414.92 428.77

Investments 3,131.17 3,410.79 3,804.44 3,833.69 3,618.03

Inventories 1,731.84 1,655.23 1,489.91 1,230.48 1,198.52

Sundry Debtors 1,435.89 3,689.95 1,292.63 1,534.65 1,024.54

Cash and Bank Balance 2,834.77 66.90 22.44 25.56 49.86

Total Current Assets 6,002.50 5,412.08 2,804.98 2,790.69 2,272.92

Loans and Advances 1,683.14 2,382.72 1,470.45 1,967.65 2,351.98

Fixed Deposits 0.00 1,871.14 2,689.85 728.56 1,885.08

Total CA, Loans & Advances

7,685.64 9,665.94 6,965.28 5,486.90 6,509.98

Deffered Credit 0.00 0.00 0.00 0.00 0.00

Current Liabilities 3,227.24 5,157.68 2,491.08 3,082.89 3,840.11

Provisions 3,057.02 3,755.31 927.82 763.03 731.20

Total CL & Provisions 6,284.26 8,912.99 3,418.90 3,845.92 4,571.31

Net Current Assets 1,401.38 752.95 3,546.38 1,640.98 1,938.67

Miscellaneous Expenses 0.00 0.00 0.00 0.00 0.00

Total Assets 6,685.68 6,258.36 9,393.11 7,482.99 7,442.15

Contingent Liabilities 341.45 297.50 276.13 261.05 252.85

Book Value (Rs) 45.42 45.60 121.74 94.16 84.24

RATIOS

DEBT EQUITY RATIO

0.23chg.2.48%

CURRENT RATIO

0.14chg.1.22%

RETURN ON ASSETS

4,634.00bps-2.42%

CIPLA LTD.

Date of Establishment 1935

Revenue 1527.95 ( USD in Millions )

Market Cap 340117.4868252 ( Rs. in Millions )

Corporate Address Mumbai Central,,Mumbai-400008, Maharashtra

www.cipla.com

Management Details Chairperson - Y K Hamied 

MD - Subhanu Saxena

Directors - Amar Lulla , Ashok Sinha, H R Manchanda, K A Hamied, M K Hamied, M R Raghavan, Mital Sanghvi, MK Hamied, Pankaj Patel, Ramesh Shroff, Ranjan Pai, S A A Pinto,

S Radhakrishnan, Subhanu Saxena, V C Kotwal, Y K Hamied

Business Operation Pharmaceuticals & Drugs

Background Chemical, Industrial & Pharmaceutical Laboratories, now known as Cipla, was incorporated 1935.Khwaja Abdul Hamied, the founder of Cipla gave the company all his patent and proprietary formulas for several drugs and medicines, without charging any royalty. On August 17, 1935, Cipla was registered as a public limited company with an authorised capital of Rs 6 lakhs.

Financials Total Income - Rs. 84315.5 Million ( year ending Mar 2013) 

Net Profit - Rs. 15071.1 Million ( year ending Mar 2013)

Company Secretary Mital Sanghvi

Bankers Bank of Baroda, Canara Bank , Corporation Bank, HSBC Bank, Indian Overseas Bank, Standard Chartered Bank, Union Bank of India

Auditors RS Bharucha & Co, RGN Price & Co, V Sankar Aiyar & Co, RGN Price & Co

INTRODUCTION

Headquartered in Mumbai, Cipla has over 34 state-of-art manufacturing units which

have been approved by various Ministries of Health and Regulatory Authorities

worldwide. In 2011, it posted revenues of `6483 crore (US $1.2 billion approximately)

and a profit of `960 crore (US $190 million approximately), making it one of the

world’s largest standalone generic pharmaceutical companies which has a presence in

over 180 countries. Its 2000-strong product-range, spanning 65 therapeutic areas,

comprises Active Pharmaceutical Ingredients (API), formulations for human and

animal healthcare, and over the counter (OTC) products. Founded by Dr Khwaja

Abdul Hamied in 1935, Cipla was started with the object of making India self-

sufficient and self-reliant in healthcare. The Chemical, Industrial & Pharmaceutical

Laboratories, as it was then called, established the country’s first research division

dedicated to attaining self-sufficiency in technological development in 1952. Under

the leadership of Dr Yusuf K Hamied, the founder’s son, who has a doctorate in

chemistry from Cambridge, Cipla pioneered API manufacturing in the country and

thus helped lay the foundation for the pharmaceutical industry in India. Cipla played

an active role in the formation of the Indian Drug Manufacturers Association (IDMA)

which consistently strove for 12 years to persuade the Indian Government towards

formulating the Patent Law, soon after which the Indian Patent Act of 1970 was

enacted. As per the new law, a pharmaceutical company could not have a patent on its

product but could patent the process for manufacturing the product for a period of

seven years. Thus, for the first time ever an Indian pharmaceutical company was

allowed to manufacture any drug and this revolutionised the healthcare scenario in

India, making drugs available and affordable to Indians. Cipla covers a wide spectrum

of diseases ranging from communicable, non-communicable, common and emerging

diseases to even rare diseases. Cipla was the first company to introduce a semi-

synthetic antibiotic, ampicillin (Ampicyn). It also introduced propranolol (Ciplar), the

first beta-blocker for heart disease and the anti-asthma drug salbutamol (Asthalin).

When India was entirely dependent on imported Metered Dose Inhalers for its

respiratory health, it stopped receiving supplies of these devices. At that time, Cipla

innovated a first of its kind technology to manufacture MDIs in the country, which has

been a boon for asthma patients.

COMPANY HISTORY

Chemical, Industrial & Pharmaceutical Laboratories, now known as Cipla, was incorporated 1935.Khwaja Abdul Hamied, the founder of Cipla gave the company all his patent and proprietary formulas for several drugs and medicines, without charging any royalty. On August 17, 1935, Cipla was registered as a public limited company with an authorised capital of Rs 6 lakhs.

Business of the company:

The company focuses on development of new formulations and has a wide range of pharmaceutical products. It offers prescription drugs, bulk drugs, animal products and pesticides. It also offers a wide range of food and beverages, baked foods, oral hygiene products, detergents, room fresheners

and personal care products.

Almost 55% of its overall income from its operations come from outside India. It has 5,500 registered products in various countries.Cipla offers drugs used for treatment of cancer, Alzheimer's, arthritis, Parkinson’s, cardiovascular diesases and many more. It also offers drugs that prevents transmission of AIDS from mother to child.The company provides consulting services on preparation of products and materials, conducts plant evaluation and supplies plant equipments.

Cipla has set up two institutes namely Dr K.A Hamied Institute and Cipla Cancer Palliative Care & Training Centre.It has a presence across 170 countries with manufacturing units approved by regulatory authorities like USFDA, WHO-Canada and MHRA-UK, among others.

Cipla was first company outside US and Europe to launch CFC-free inhalers. In 2007 Cipla launched oral emergency contraceptive pill under the brand name I-Pill. Cipla also launched a breakthrough screening technology in India called the ‘No Touch Breast Scan (NTBS); ' the first-ever painless, non-invasive and radiation-free breast scanning technique for detecting breast cancer at an early stage.

In 2009, Cipla launched generic versions of anti-flu drugs oseltamivir and zanamivir in the local market to treat the H1N1 influenza, spreading across the globe and in India. In 2010, Piramal Healthcare Limited announced the signing of a definitive agreement with Cipla Limited for purchase of all intellectual property rights in India related to 'i-pill' for an aggregate consideration of Rs 95 crore.

Achievements:

The company won the Forbes Asia's “Best Under A Billion” List from Forbes Magazine.

Cipla also won the Most Profitable Company overall among those “Under a Billion in the Region’s Top 200 Small and Mid Size companies” from Forbes Magazine.

Milestones:

1935-Dr K A Hamied sets up 'The Chemical, Industrial and Pharmaceutical Laboratories Ltd.' in a rented bungalow, at Bombay Central. 1941-As the Second World War cuts off drug supplies, the company starts producing fine chemicals, dedicating all its facilities for the war effort. 1952- Sets up first research division for attaining self-sufficiency in technological development. 1960- Starts operations at second plant at Vikhroli, Mumbai, producing fine chemicals with special emphasis on natural products. 1968- Cipla manufactures ampicillin for the first time in the country. 1972-Starts Agricultural Research Division at Bangalore, for scientific cultivation of medicinal plants. 1976-Cipla launches medicinal aerosols for asthma. 1980-Wins Chemexcil Award for Excellence for exports. 1982-Fourth factory begins operations at Patalganga, Maharashtra. 1984-Develops anti-cancer drugs, vinblastine and vincristine in collaboration with the National Chemical Laboratory, Pune

PRODUCT

Product Name YearMont

hSales 

Quantity

Sales Value(Rs.Million

)

% of STO

Tablets & Capsules 2013 03 0.00 44999.10 54.25

Bulk Drugs 2013 03 0.00 7569.20 9.13

Aerosols/Inhalation Devices

2013 03 0.00 7362.80 8.88

Injections/Sterile 2013 03 0.00 6534.60 7.88

Solutions

Tablets & Capsules - Traded

2013 03 0.00 4339.60 5.23

Liquids 2013 03 0.00 2863.60 3.45

Liquids - Traded 2013 03 0.00 1761.50 2.12

Injections/Sterile Solutions - Traded

2013 03 0.00 1350.00 1.63

Bulk Drugs - Traded

2013 03 0.00 1218.00 1.47

Creams 2013 03 0.00 1087.30 1.31

Technical Know-how/Fees

2013 03 0.00 659.30 0.79

Export Incentives 2013 03 0.00 632.10 0.76

Others - Traded 2013 03 0.00 548.10 0.66

Aerosols/Inhalation Devices - Traded

2013 03 0.00 496.60 0.60

Others 2013 03 0.00 490.30 0.59

Creams - Traded 2013 03 0.00 454.60 0.55

Scrap 2013 03 0.00 308.80 0.37

Services Income 2013 03 0.00 270.30 0.33

Tablets & Capsules 2012 03 0.00 36443.10 51.51

Bulk Drugs 2012 03 0.00 7782.10 11.00

Aerosols/Inhalation Devices

2012 03 0.00 5848.30 8.27

Injections/Sterile Solutions

2012 03 0.00 5802.60 8.20

Liquids 2012 03 0.00 3663.30 5.18

Tablets & Capsules - Traded

2012 03 0.00 3370.00 4.76

Liquids - Traded 2012 03 0.00 1461.70 2.07

Bulk Drugs - Traded

2012 03 0.00 1195.90 1.69

Injections/Sterile Solutions - Traded

2012 03 0.00 1000.30 1.41

Creams 2012 03 0.00 824.60 1.17

Export Incentives 2012 03 0.00 809.50 1.14

Creams - Traded 2012 03 0.00 515.80 0.73

Others - Traded 2012 03 0.00 446.60 0.63

Others 2012 03 0.00 368.30 0.52

Aerosols/Inhalation Devices - Traded

2012 03 0.00 326.50 0.46

Technical Know-how/Fees

2012 03 0.00 310.30 0.44

Services Income 2012 03 0.00 270.10 0.38

Scrap 2012 03 0.00 255.40 0.36

Other Operating Income

2012 03 0.00 52.90 0.0

COMPETITORS

CompanySales

(Rs.Million)

Current

Price

Change (%)

P/E Ratio

MarketCap.

(Rs.Million)

52-WeekHigh/Lo

w

Sun Pharma Inds.

40155.60 550.80 0.62206.3

01133755.12 581/321

Dr Reddys Lab 84340.00 2208.00 -1.42 33.04 380902.462401/161

7

Lupin 71225.10 845.35 0.78 28.59 375623.08 908/540

Cipla 82024.20 420.00 -0.85 21.51 340117.49 435/348

Glaxosmithklin 26756.96 2299.95 1.10 33.52 192686.66 2899/193

e Phar 1

Ranbaxy Labs. 63035.44 394.20 -1.00 0.00 168490.17 578/254

Piramal Enterprises

14031.90 585.10 -0.24 0.00 150528.73 625/395

Glenmark Pharma

20253.78 532.70 -2.59 32.99 148163.24 612/387

Cadila Healthcare

31508.00 680.20 0.59 21.18 138450.95 964/670

DiviS Lab 21288.90 998.85 -0.10 21.45 132707.74 1233/905

Ipca Laboratories

27712.40 660.10 0.82 22.94 82622.56 708/389

Torrent Pharma 27662.30 428.00 1.18 11.68 71579.46 465/315

Biocon 19380.00 341.05 -0.96 23.48 68870.00 351/240

Sanofi India 15730.40 2475.05 -1.20 30.11 57694.012899/206

0

Aurobindo Pharma

54251.00 190.15 1.68 7.90 54456.51 205/102

Strides Arcolab 7120.07 755.00 -8.26 35.30 48639.40 1225/553

Wockhardt 24711.80 440.25 5.00 7.57 45948.32 2166/344

Matrix Laboratories

28529.70 209.35 0.00 7.03 32729.53 211/209

Pfizer 10954.42 1057.00 0.32 14.17 31442.43 1361/985

Alembic Pharma

14926.38 157.45 -2.08 16.87 30313.36 168/60

Abbott India 16526.89 1370.00 0.66 19.37 28921.361650/130

6

Sun Pharma Adv. Res

872.79 117.50 0.77516.8

527599.74 174/69

Ajanta Pharma 8392.00 899.10 1.30 18.23 20798.67 1177/353

Fresenius Kabi Oncol

5963.00 124.95 -0.72 25.16 19912.95 154/79

Natco Pharma 4319.99 615.20 1.03 24.45 19104.63 640/342

Astrazeneca Pharma I

3889.92 878.00 18.95 0.00 18453.75 1944/595

FDC 7645.95 86.95 0.52 9.57 15393.02 106/83

Wyeth 5940.66 619.90 0.29 12.39 14043.27 1044/610

Jubilant LifeScience

31463.03 89.40 2.58 0.00 13881.35 248/75

Unichem Lab 10052.17 154.50 2.22 10.33 13689.69 217/138

Novartis 9033.60 387.10 -1.14 11.74 12514.25 740/385

Claris Lifesciences

7180.14 170.00 -0.70 15.02 10925.60 292/142

Solvay Pharma 2947.30 2141.55 0.00 21.30 10814.20 3200/166

JB Chem & Pharma

8164.23 83.00 -1.37 7.06 7128.50 9664

Kappac Pharma NA 286.00 0.00 0.00 6795.67 288/11

Hikal 6942.35 407.00 0.64 11.66 6648.38 518/305

Elder Pharma 9846.87 293.00 -2.09 7.07 6145.68 474/202

Indoco Remedies

6303.96 64.00 -0.78 14.33 5943.70 83/55

Shilpa Medicare 3281.96 170.20 11.97 12.17 5591.51 219/136

Panacea Biotec 7005.80 90.55 -0.06 0.00 5549.32 158/73

TTK Healthcare 3822.98 540.30 -1.67 37.51 4267.02 663/340

Dishman Pharma

4846.36 48.80 1.04 6.93 3897.67 125/37

2578.85 32.50 -1.66 7.33 3861.19 35/17

BALANCE SHEET

………..Rs. cr…………..

Mar '13 Mar '12 Mar '11 Mar '10 Mar '09

Sources Of Funds

Total Share Capital 160.58 160.58 160.58 160.58 155.46

Equity Share Capital 160.58 160.58 160.58 160.58 155.46

Share Application Money 0.00 0.00 0.00 0.00 0.00

Preference Share Capital 0.00 0.00 0.00 0.00 0.00

Reserves 8,708.94 7,380.73 6,443.40 5,744.54 4,186.32

Revaluation Reserves 0.00 8.97 8.97 8.97 8.97

Net worth 8,869.52 7,550.28 6,612.95 5,914.09 4,350.75

Secured Loans 9.49 10.00 2.95 0.41 2.79

Unsecured Loans 956.32 2.20 438.44 4.66 937.45

Total Debt 965.81 12.20 441.39 5.07 940.24

Total Liabilities 9,835.33 7,562.48 7,054.34 5,919.16 5,290.99

Application Of Funds

Gross Block 4,994.16 4,298.18 3,929.00 2,895.44 2,693.29

Less: Accum. Depreciation

1,565.52 1,295.52 1,060.98 884.27 700.80

Net Block 3,428.64 3,002.66 2,868.02 2,011.17 1,992.49

Capital Work in Progress 339.99 420.73 253.07 684.24 366.32

Investments 2,601.82 1,035.15 570.28 265.10 81.32

Inventories 2,343.37 1,824.50 1,883.16 1,512.58 1,398.32

Sundry Debtors 1,645.22 1,519.31 1,497.04 1,552.71 1,837.15

Cash and Bank Balance 105.07 53.82 83.56 60.32 52.84

Total Current Assets 4,093.66 3,397.63 3,463.76 3,125.61 3,288.31

Loans and Advances 1,029.10 1,136.14 2,558.23 2,357.29 1,131.10

Fixed Deposits 0.00 1.48 0.57 0.52 0.16

Total CA, Loans & Advances

5,122.76 4,535.25 6,022.56 5,483.42 4,419.57

Deffered Credit 0.00 0.00 0.00 0.00 0.00

Current Liabilities 1,380.91 1,190.78 1,150.72 1,177.11 1,177.00

Provisions 276.97 240.53 1,508.87 1,347.66 391.71

Total CL & Provisions 1,657.88 1,431.31 2,659.59 2,524.77 1,568.71

Net Current Assets 3,464.88 3,103.94 3,362.97 2,958.65 2,850.86

Miscellaneous Expenses 0.00 0.00 0.00 0.00 0.00

Total Assets 9,835.33 7,562.48 7,054.34 5,919.16 5,290.99

Contingent Liabilities 3,154.68 608.80 478.26 423.87 730.75

Book Value (Rs) 110.47 93.92 82.25 73.55 55.86

RATIOS

DEBT EQUITY RATIO

-0.07chg.0.00%

CURRENT RATIO

0.90chg.3.17%

RETURN ON ASSETS

125.00bps14.86%

BIBLIOGRAPHY

1. http://economictimes.indiatimes.com

2. http://www.moneycontrol.com

3. http://info.shine.com/Industry-Information/Pharmaceuticals/

4. http://en.wikipedia.org/wiki/Pharmaceutical_industry_in_India

5. http://www.indianotes.com/research-analysis/company/company-overview.php?cc=MTI1NDAwMTAuMDA=&companyname=Cipla-Ltd

6. http://www.business-standard.com/article/companies/indian-generic-cos-struggle-to-crack-2nd-largest-pharma-market-