Description
In the Top down approach, first of all the overall Economy is analyzed to judge the general direction, in which the economy is heading. The direction in which the economy is heading has a bearing on the performance of various industries
TABLE OF CONTENTS
SL.No
Particulars Page numbers
1. Executive Summary
. !ntro"uction to t#e To$ic
%. Economic analysis
&. !n"ustrial Analysis
'. Com$any analysis o( )anbaxy
*. Com$any Analysis o( Ci$la
+. Com$arative )atio Table o( )anbaxy
,. Com$arative )atio Table o( Ci$la
-. Fin"ings
1.. Annexures an" Bibliogra$#y
Executive Summary
!n t#e To$ "o/n a$$roac#0 (irst o( all t#e overall Economy is analy1e" to 2u"ge t#e general
"irection0 in /#ic# t#e economy is #ea"ing. T#e "irection in /#ic# t#e economy is #ea"ing
#as a bearing on t#e $er(ormance o( various in"ustries. T#ats /#y Economy analysis is
im$ortant. T#e out$ut o( t#e Economy analysis is a list o( in"ustries0 /#ic# s#oul" $er(orm
/ell0 given t#e general tren" o( t#e economy an" also an i"ea0 /#et#er to invest or not in t#e
given economic con"itions.
Fun"amental analysis is t#e analysis0 /#erein t#e investment "ecisions are ta3en on t#e basis
o( t#e (inancial strengt# o( t#e com$any. T#ere are t/o a$$roac#es to (un"amental analysis0
vi1.0 E4!4C analysis or t#e To$ 5o/n a$$roac# to Fun"amental analysis an" C4!4E analysis or
t#e Bottom u$ a$$roac#. !n t#e (ollo/ing section0 /e ex$lain bot# t#ese a$$roac#es.
T#e main ob2ective o( un"erta3ing t#e $ro2ect in E4!4C Analysis is 6
• 7easuring t#e $er(ormances o( t#e com$any by calculating relate" ratios.
Sub Ob2ectives 6
• Pre"icting t#e (uture Sales0 ex$ecte" EPS 0 etc o( t#e com$any.
• To measure t#e viability o( t#e t/o com$anies.
!ntro"uction to t#e Com$any64
.!L8FS investsmart is !n"ia9s largest Financial 7ulti$lex.!t /as A/ar"e" as at#e best
Financial A"visor in retail segment by CNBC T: in ..*.
!L8FS !nvestsmart Limite" ;!!L< is an initiative in t#e (iel" o( Financial Services starte" by
!n(rastructure Leasing 8 Financial Services ;!L8FS<0 an institution 3no/n (or its innovative
an" $ioneering initiatives in t#e areas o( !n(rastructure0 Cor$orate Finance an" !nvestment
Ban3ing. !!L /as set u$ in October 1--+ an" began its retail o$erations in Se$tember 1--,
!L8FS !nvestsmart Limite" ;!!L< /as set u$ /it# t#e ob2ective o( becoming one o( t#e
lea"ing (ull service bro3erage #ouses in t#e country /it# a strong ex$ertise in /eb4base"
tec#nology as /ell as strengt#s in $#ysical "istribution. To"ay /it# a $resence in more t#an
-. cities across !n"ia t#roug# more t#an .. outlets0 !!L #as become one o( t#e most
$rominent $layers in t#e Financial Services !n"ustry /it# service o((erings across "i((erent
categories
Promoters an" S#are#ol"ers o( !L8FS !nvestsmart Limite"
As mentione" earlier !!L /#ic# /as $romote" by !L8FS in 1--+0 #as come a long /ay since
its ince$tion. !t is a matter o( great $ri"e (or !!L t#at some o( t#e /orl"=s biggest
organisations are becoming e>uity o/ners o( t#e com$any
T#e stoc3#ol"ing $attern as o( to"ay involves !L8FS /#ic# #ol"s %..*&? e>uity sta3e0
/#ile So(tban3 Asia !n(rastructure Fun" L.P. ;SA!F< an" E@T)A5E F!NANC!AL0 t#roug#
its /#olly o/ne" subsi"iary
)etail business64
T#e )etail Business 5ivision at !!L is involve" in "ealing /it# a range o( (inancial $ro"ucts
o((ere" to customers across !n"ia t#roug# multi$le locations. T#e retail business is (urt#er
categorise" into various business "ivisions catering to varie" nee"s o( our customers. T#ese
inclu"e "ivisions catering to customers (or !nvestment o$tions suc# as E>uity Tra"ing0
5erivatives Tra"ing0 Commo"ity Tra"ing0 !PO !nvestments0 Fixe" !ncome $ro"ucts0 7utual
Fun" !nvestments as /ell as !nsurance 8 Aome Loans A"visory services. !n a""ition /e also
o((er allie" services to (acilitate t#e investment $rocess0 li3e custo"ial an" "e$ository
services0 /#ic# are o((ere" t#roug# t#e !L8FS 5e$ository Services. !!L=s ex$ertise across all
t#ese categories enable it to res$on" to t#e varying nee"s o( a "eman"ing clientele ensuring
t#at t#eir investment $lans are execute" as $er t#eir in"ivi"ual re>uirements
7erc#ant ban3ing "ivision
T#e 7erc#ant Ban3ing "ivision o((ers a com$lete range o( services /#ic# inclu"es
management o( !POs0 rig#ts issues0 buy bac3 o((ers0 o$en o((ers an" $rivate $lacements o(
e>uity. !ts extensive contact base an" strong relations#i$s "evelo$e" /it# :enture Ca$ital
Fun"s an" Private E>uity Fun"s (or e>uity $lacements0 contributes to an e((ective "elivery
$lat(orm (or its clients
!nstitutional E>uity Business 5ivision64
!nstitutional E>uity Business ;!EB< t#rives on strong relations#i$s it #as built among
"omestic mutual (un"s0 ban3s0 (inancial institutions0 insurance com$anies an" $rivate sector
(un"s over t#e $ast (e/ years. !EB also #as /ell4"evelo$e" relations#i$s among cor$orates0
leverage" (rom its institutional $e"igree. E((icient execution0 >uality researc# an" #ig#
"egree o( com$liance /it# stoc3 exc#ange regulations an" et#ical business stan"ar"s bac3
!EB9s services to institutional investors t#roug# !POs0 E>uities0 5erivatives an" 7utual
Fun"s. !EB is /ell $ositione" to o((er su$$ort to t#e com$lete range o( investment ban3ing
services to cor$orate
5ebt bro3ing "ivision64
T#e 5ebt "ivision #as an active $resence in t#e secon"ary an" $rimary "ebt $lacement
mar3ets. !t "eals in various $ro"ucts inclu"ing Bovernment Securities0 Treasury Bills0 Bon"s
an" 5ebentures0 State guarantee" $a$ers an" Commercial $a$ers. !t #as strong realtions#i$
/it# !nstitutional clients suc# as Ban3s0 Primary 5ealers0 7utual Fun"s0
Pro2ect Syn"ication "ivision64
T#e Pro2ect Syn"ication "ivision #as been in#erite" (rom !L8FS. T#e syn"ication "es3 #as
so (ar /or3e" on 5ebt Syn"ication o( various large !n(rastructure Pro2ects in t#e country. T#e
man"ate inclu"es 5ebt structuring o( #ig#ly com$lex an" "i((icult $ro2ects. Pro2ect
Syn"ication (ocuses on t#e role o( an Arranger o( Pro2ect an" Structure" loans. C#ile (un"
mobilisation services are $rovi"e" across various areas0 in(rastructure sectors remain 3ey
(ocus areas (or syn"ication activity. T#e services un"er Pro2ect Syn"ication inclu"e $ro2ect
loan syn"ication0 structure" "ebt syn"ication an" "ebt restructuring. T#e syn"ication business
t#rives on its extensive contact base an" strong relations#i$s "evelo$e" over t#e years /it#
Ban3s an" Financial !nstitutions
!ntro"uction o( to$ic.
To "etermine t#e intrinsic value o( an e>uity s#are t#e security analyst must (orecast
t#e earnings an" t#e "ivi"en"s ex$ecte" (rom t#e stoc3s an" c#oose a "iscount rate /#ic#
re(lects t#e ris3iness o( t#e stoc3. T#is is /#at involve" in t#e (un"amental analysis /#ic# is
t#e most $o$ular met#o" use" by t#e investments $ro(essionals.
T#e earnings $otential an" ris3iness o( t#e (irm are lin3e" to t#e $ros$ects o( t#e
in"ustry to /#ic# it belongs. So t#e $ros$ects o( t#e various in"ustries are largely in(luence"
by t#e "evelo$ments in t#e macro economy.
T#e researc#ers #ave (oun" t#at stoc3 $rice c#anges can be attribute" to t#e
(ollo/ing (actors6
? Economy /i"e (actors6 %.4%' $ercent.
? !n"ustry (actors6 1'4. $ercent.
? Com$any (actors 6 %.4%' $ercent
? Ot#er (actors6 1'4' $ercent
Base" on t#e above evi"ence0 a commonly a"vocate" $roce"ure o( t#e (un"amental analysis
involves a t#ree4 ste$ examination .T#ey are6
? Dn"erstan"ing o( t#e macro4economic environmental "evelo$ments.
? Analy1ing t#e $ros$ects o( t#e in"ustry to /#ic# t#e (irm belongs.
? Assessing t#e $ro2ecte" in(ormation o( t#e com$any an" t#e intrinsic value o( its s#ares.
T#e !n"ian P#armaceutical in"ustry is #ig#ly (ragmente" /it# about &0... $layers ;aroun"
%%. in t#e organise" sector<. T#e to$ ten com$anies ma3e u$ (or more t#an a t#ir" o( t#e
mar3et. T#e revenues generate" by t#e in"ustry are a$$roximately DSE + bn an" #ave gro/n
at an average rate o( 1.? over last (ive years. T#e !n"ian $#arma in"ustry accounts (or about
1? o( t#e /orl"=s $#arma in"ustry in value terms an" ,? in volume terms.
!n t#e recent $ast0 !n"ian com$anies #ave targete" international mar3ets an" #ave exten"e"
t#eir $resence t#ere. C#ile some com$anies are ex$orting bul3 "rugs0 ot#ers #ave move" u$
t#e value c#ain an" are ex$orting (ormulations an" generic $ro"ucts. !n"ia also o((ers
excellent ex$orts o$$ortunities (or clinical trials0 )850 custom synt#esis an" tec#nical
services li3e Bioin(ormatics.
T#e "rug $rice control or"er ;5PCO< continues to be a menace (or t#e in"ustry. T#ere are
t#ree tiers o( regulations F on bul3 "rugs0 on (ormulations an" on overall $ro(itability. T#is
#as ma"e t#e $ro(itability o( t#e sector susce$tible to t#e /#ims an" (ancies o( t#e $ricing
aut#ority. T#e ne/ P#armaceutical Policy ..*0 /#ic# $ro$oses to bring %'& essential "rugs
un"er $rice control #as not been o((icially $asse" as yet an" #as been sti((ly o$$ose" by t#e
$#armaceutical in"ustry.
C#ile t#e average )85 s$en"ing in !n"ia as a /#ole is a meager ? o( sales0 t#e s$en" o(
t#e to$ (ive com$anies is about '? to 1.?. 5es$ite gro/ing at a CAB) o( over '.? over
t#e last (our years0 t#e ratio is still /ay belo/ t#e global average o( 1'? to .? o( sales.
Ao/ever0 "es$ite t#e
relatively lo/ )85 s$en"ing0 !n"ian com$anies are ste$$ing u$ t#eir researc# activities to
ma3e t#emselves more sel( su((icient in terms o( $ro"uct "evelo$ment0 no/ t#at t#e $ro"uct
$atent regime #as come into (orce.
Su$$ly64 Aig#er (or tra"itional t#era$eutic segments0 /#ic# is ty$ical o( a "evelo$ing mar3et.
)elatively lo/er (or li(estyle segment.
5eman"64 :ery #ig# (or certain t#era$eutic segments. Cill c#ange as li(e ex$ectancy0 literacy
increases.
Barriers to entry64 Licensing0 "istribution net/or30 $atents0 $lant a$$roval by regulatory
aut#ority.
Bargaining $o/er o( su$$liers64 5istributors are increasingly $us#ing generic $ro"ucts in a
bi" to earn #ig#er margins.
Bargaining $o/er o( customers64 Aig#0 a (ragmente" in"ustry #as ensure" t#at t#ere is
/i"es$rea" com$etition in almost all $ro"uct segments. ;Currently also $rotecte" by t#e
5PCO<.
Com$etition64 Aig# (ragmente" in"ustry /it# t#e to %.. ;o( &...
7anu(acturing units<$layers accor"ing (or ,'? o( sales value.Consoli"ation is li3e to
intensi(y
!m$act o( BD5BET 4..,6
Bu"get ..,4.-6 P#armaceuticals
T#e $ast year #as been tumultuous (or t#e $#arma in"ustry0 /#ic# #as #a" to conten" /it# a
stee$ly rising ru$ee0 severe $rice erosion an" regulatory c#anges in t#e global generics
mar3ets an" rise in ra/ material costs. Aaving sai" t#at0 some $ositive "evelo$ments also
ensure" t#at t#e overall scenario /as not too ba". T#ese "evelo$ments inclu"e"
announcements by some ma2or "omestic $#arma ma2ors o( #iving o(( t#eir )85 units into
se$arate com$anies0 bagging out4licensing "eals /it# global innovators in return (or
milestone $ayments an" settling $atent la/suits /it# innovators to ensure a more stable an"
balance".
Bu"get 7easure
• !ncrease in allocation to t#e #ealt# sector by 1'? over ..+4.,.
• Allocation to t#e National )ural Aealt# 7ission ;N)A7< increase" to )s 10.'.
crore.
• Provision o( )s --% crore to t#e National Ai"s Control Programme an" allocation o(
)s 10.& crore (or t#e era"ication o( $olio /it# (ocus on #ig# ris3 "istricts in Dttar
Pra"es# an" Bi#ar.
• Customs "uty to be re"uce" (rom 1.? to '? on certain s$eci(ie" li(e saving "rugs
an" on bul3 "rugs use" (or t#eir manu(acture. T#ese "rugs are also exem$te" (rom
excise "uty or countervailing "uty.
• Excise "uty on all goo"s $ro"uce" in t#e $#armaceutical sector re"uce" (rom 1*? to
,?.
• Anti4A!5S "rug0 GAta1anavir90 as /ell as bul3 "rugs (or its manu(acture to be
exem$te" (rom excise "uty.
• !n or"er to $romote outsourcing o( researc#0 /eig#te" "e"uction o( 1'? on any
$ayment ma"e to com$anies engage" in )85.
BD5BET !7PACT
• !ncrease in allocation to t#e #ealt#care sector is a $ositive given t#e nee" to ram$ u$
t#e #ealt#care in(rastructure in t#e country an" im$rove t#e accessibility o( >uality
#ealt#care to a larger section o( t#e $o$ulation.
• )e"uction o( excise "uty (rom 1*? to ,? is a $ositive (or all $#arma com$anies
enabling t#em to boost $ro(itability going (or/ar" given t#at t#e excise "uty is being
$ai" on 7)P.
• !ncrease" allocation o( (un"s (or era"ication o( A!:HA!5S an" $olio an" re"uction in
customs "uty on certain li(e saving "rugs (rom 1.? to '? is a $ositive (or com$anies
#aving $ro"uct $i$eline catering to t#ese segments.
• Ceig#te" "e"uction o( 1'? on $ayments ma"e (or outsourcing researc# services is a
$ositive (or t#e sector as a /#ole given t#at t#e em$#asis on )85 #as increase".
CO7PANI !7PACT6
)e"uction o( excise "uty (rom 1*? to ,? is a $ositive (or all $#arma com$anies namely
"omestic com$anies suc# as Ci$la0 )anbaxy an" t#e li3es an" 7NC $#arma com$anies suc#
as BSJ P#arma0 P(i1er an" Aventis.
Em$#asis on allocating (un"s (or t#e era"ication o( A!:HA!5S an" $olio is a $ositive (or
Ci$la ;/#ic# #as a strong $resence in t#e manu(acture o( anti4A!5S "rugs< an" Panacea
Biotec ;/#ic# largely manu(actures oral $olio vaccines<.
Ceig#te" "e"uction o( 1'? on $ayments ma"e (or outsourcing researc# services is a
$ositive (or )85 (ocuse" com$anies suc# as )anbaxy an" Nic#olas Piramal.
!ntro"uction to )anbaxy6
)anbaxy Laboratories is >uite t#e rainma3er in !n"ia=s $#armaceutical business. T#e
com$any is !n"ia=s largest "rug "evelo$er an" manu(acturer0 /it# generics to$$ing its list o(
$ro"ucts. Anti4in(ectives CoAmoxyclav0 Amoxycillin0 Ce$#alexin0 Ci$ro(loxacin0 an"
Simvastatin are in )anbaxy=s to$ selling class o( me"icationsK all come in several
a"ministration (orms. Ot#er s$eci(ic "evelo$mental (ocuses inclu"e metabolic0 in(lammatory0
an" res$iratory illnesses. )anbaxy a""resses gastrointestinal0 car"iovascular0 an" central
nervous system "isor"ers0 as /ell as "iabetes0 $ain0 allergies0 an" A!:HA!5S. T#e com$any
also #as a groun"brea3ing anti4malarial can"i"ate in late4$#ase trials.
Aistory
)anbaxy Laboratories Lt". is t#e largest $#armaceutical com$any in !n"ia0 an" one o( t#e
/orl"=s to$ 1.. $#armaceutical com$anies. Long a s$ecialist in t#e $re$aration o( generic
"rugs0 )anbaxy is also one o( t#e /orl"=s to$ 1. in t#at $#armaceutical category as /ell. Iet0
/it# !n"ia=s agreement to a$$ly international $atent la/ at t#e beginning o( ..'0 )anbaxy
#as begun converting itsel( into a (ull4(le"ge" researc#4base" $#armaceutical com$any. A
ma2or $art o( t#is e((ort #as been t#e establis#ment o( t#e com$any=s o/n researc# an"
"evelo$ment center0 /#ic# #as enable" t#e com$any to begin to enter t#e ne/ c#emical
entities ;NCE< an" novel "rug "elivery systems ;N55S< mar3ets. !n t#e mi"4...s0 t#e
com$any #a" a number o( NCEs in $rogress0 an" #a" alrea"y launc#e" its (irst N55S
$ro"uct0 a single "aily "osage (ormulation o( ci$ro(loxacin. )anbaxy is a truly global
o$eration0 $ro"ucing its $#armaceutical $re$arations in manu(acturing (acilities in seven
countries0 su$$orte" by sales an" mar3eting subsi"iaries in && countries0 reac#ing more t#an
1.. countries t#roug#out t#e /orl". T#e Dnite" States0 /#ic# alone accounts (or nearly #al(
o( all $#armaceutical sales in t#e /orl"0 is t#e com$any=s largest international mar3et0
re$resenting more t#an &. $ercent o( grou$ sales. !n Euro$e0 t#e com$any=s $urc#ase o( )PB
;Aventis< S.A. ma3es it t#e largest generics $ro"ucer in t#at mar3et. T#e com$any is also a
lea"ing generics $ro"ucer in t#e Dnite" Jing"om an" Bermany an" else/#ere in Euro$e.
Euro$ean sales a""e" 1* $ercent to t#e com$any=s sales in ..&. )anbaxy=s ot#er ma2or
mar3ets inclu"e Bra1il0 )ussia0 an" C#ina0 as /ell as !n"ia0 /#ic# toget#er a""e" * $ercent
to t#e grou$=s sales. )anbaxy $oste" revenues o( E1.1, billion in ..&. T#e com$any0 /#ic#
remains controlle" an" le" by t#e (oun"ing Sing# (amily0 is liste" on t#e National Stoc3
Exc#ange o( !n"ia in 7umbai.
)anbaxy Laboratories #a" its origins in t#e early 1-*.s /#en )an2it Sing# an" Burbux
Sing#0 t/o em$loyees o( a La$anese $#armaceutical com$any o$erating in !n"ia0 (orme"
t#eir o/n $#armaceutical $re$arations com$any in Amritsar0 in Pun2ab state. T#e t/o merge"
t#eir names to (orm t#e name (or t#eir com$any0 )anbaxy.
T#roug# t#e 1-*.s0 !n"ia=s $#armaceutical mar3et remaine" "ominate" by (oreign "rug
ma3ers. T#e "omestic $#armaceutical manu(acturing in"ustry /as limite" in large $art to t#e
"osage $re$aration0 $ac3aging0 an" "istribution o( existing (ormulations. Li3e many !n"ian
"rug com$anies o( t#is $erio"0 )anbaxy lin3e" u$ /it# a Euro$ean $#armaceutical com$any0
an" began $ro"uction in 1-*.
)anbaxy=s o/ners soug#t a""itional (inancing an" turne" to a local moneylen"er0 B#ai
7o#an Sing#. By 1-**0 t#e $air #a" built u$ "ebts to Sing# o( more t#an t#e e>uivalent o(
E1..0.... C#en Sing#0 a native o( Pa3istan /#o #a" arrive" in !n"ia at t#e beginning o( t#at
"eca"e0 came to collect0 t#e )anbaxy $artners o((ere" to turn over t#eir com$any to #im
instea".
Sing# agree" to t#e "eal an" launc#e" t#e )anbaxy (amily on t#e $at# to/ar" buil"ing one o(
!n"ia=s largest business em$ires. Dn"er B#ai 7o#an Sing#0 )anbaxy initially maintaine" its
course o( $re$aring an" $ac3ing existing bran"e" $#armaceutical $ro"ucts (or t#e !n"ian
mar3et. T#e entry o( Sing#=s el"est son0 Parvin"er0 into t#e com$any in 1-*+0 #o/ever0 set
t#e com$any on a ne/ course to become a (ully in"e$en"ent $#armaceutical com$any.
Parvin"er Sing# #a" 2ust gra"uate" /it# a P#5 in c#emistry (rom t#e Dniversity o(
7ic#igan. T#e younger Sing#=s bac3groun" in c#emistry com$lemente" #is (at#er=s business
(lair. Iet Parvin"er Sing# #imsel( >uic3ly "is$laye" a talent (or business an" /as cre"ite"0 in
large $art0 /it# gui"ing t#e com$any into t#e ran3s o( t#e global $#armaceutical lea"ers.
)anbaxy=s goo" (ortune came in 1-+.0 /#en t#e !n"ian government $asse" legislation t#at
e((ectively en"e" $atent $rotection in t#e $#armaceutical in"ustry. !n"ian $#armaceutical
manu(acturers /ere no/ able to $ro"uce lo/4cost0 generic versions o( $o$ular0 yet ex$ensive
"rugs0 revolutioni1ing t#e "rug in"ustry in !n"ia an" in muc# o( t#e /orl". T#e Sing#s
>uic3ly too3 a"vantage o( !n"ia=s large0 #ig#ly traine"0 yet inex$ensive /or3(orce0 buil"ing
u$ a strong sta(( o( c#emists an" c#emical engineers.
T#e com$any struc3 $ay "irt early on0 /#en it launc#e" Calm$ose0 a generic (ormulation o(
t#e #ugely $o$ular )oc#e "iscovery0 :alium. )elease" in 1-*-0 Calm$ose imme"iately
$lace" )anbaxy on !n"ia=s $#armaceutical ma$. T#e com$any ex$an"e" >uic3ly0 an" by
1-+%0 )anbaxy o$ene" a ne/ (actory0 in 7o#ali0 (or t#e $ro"uction o( active $rinci$al
ingre"ients ;AP!s<. T#is (acility enable" t#e com$any to ex$an" its range o( generic
me"ications an" ingre"ients. To (inance its gro/t#0 t#e com$any liste" on t#e !n"ian Stoc3
Exc#ange t#at year.
)anbaxy=s ability to $ro"uce generic me"ications at (ar lo/er cost t#an its bran"e"
com$etitors $lace" t#e com$any in a strong $osition (or international ex$ansion0 es$ecially in
less "evelo$e" mar3ets. T#e com$any began its internationali1ation early on0 launc#ing a
2oint venture in Nigeria. T#at o$eration o$ene" a $ro"uction (acility in Lagos in 1-++.
)anbaxy ex$an"e" its $ro"uction at #ome as /ell0 o$ening a ne/ state4o(4t#e4art "osage
$lant in 5e/as in 1-,%. !n 1-,+0 t#e com$any became !n"ia=s lea"ing antibiotic an"
antibacterial $ro"ucer /#en it com$lete" a ne/ AP! $lant in Toansa0 in Pun2ab0 t#at year. T#e
Toansa (acility bac3e" u$ )anbaxy=s $lans to enter t#e D.S. mar3et0 an" in 1-,,0 t#e Toansa
$lant receive" Foo" an" 5rug A"ministration ;F5A< a$$roval.
)anbaxy (ormulate" a ne/ strategy0 t#at o( becoming a (ull4(le"ge" $#armaceutical
com$any. T#e "riving (orce be#in" t#e com$any=s ne/ "irection /as Parvin"er Sing#0 /#o
/as name" t#e com$any=s managing "irector in 1-,. Nonet#eless0 B#ai 7o#an Sing#
remaine" in control o( t#e com$any.
As $art o( its ne/ strategy0 )anbaxy launc#e" its o/n researc# an" "evelo$ment center in
1-,'. T#e com$any also ste$$e" u$ its mar3eting e((orts0 launc#ing a ne/ "e"icate"
mar3eting subsi"iary0 Stancare0 t#at year. By 1--.0 t#e com$any #a" a ne/ $ro"uct to sell0
/#en )anbaxy /as grante" a D.S. $atent (or its "oxycycline antibiotic $re$aration. T#e
(ollo/ing year0 t#e com$any /as grante" a D.S. $atent (or its ce$#alos$orin $re$arations0
an" t#e com$any built a ne/ state4o(4t#e4art (acility (or t#eir $ro"uction in 7o#ali.
A ma2or milestone (or t#e com$any came in 1--0 /#en it reac#e" a mar3eting agreement
/it# Eli Lilly 8 Co. T#e com$anies set u$ a 2oint venture in !n"ia to $ro"uce an" mar3et
Lilly=s bran"e" $#armaceuticals (or t#e "omestic mar3et. At t#e same time0 Lilly agree" to
begin mar3eting )anbaxy=s generic me"ications in t#e Dnite" States. !n t#is /ay0 )anbaxy
gaine" /i"escale access0 bac3e" by t#e #ig#ly res$ecte" Lilly0 into t#e /orl"=s single largest
"rugs mar3et.
Parvin"er Sing# too3 over as #ea" o( t#e com$any44ousting #is (at#er in /#at /as "escribe"
as a (amily (eu"44in 1--. By t#en0 )anbaxy #a" gro/n into one o( !n"ia=s largest
$#armaceutical com$anies on t#e basis o( its generics $ro"uction. Iet as $ressure gre/ on
!n"ia to begin en(orcing international "rug $atents0 t#e com$any itsel( a$$eare" to #ave
reac#e" a crossroa"s44/#et#er to remain (ocuse" on co$ying generic molecules0 or to begin
"evelo$ing ne/ "rugs in4#ouse. T#e com$any c#ose t#e latter0 an" in 1--% a"o$te" a ne/
cor$orate mission to announce its re(ormulate" ambitions6 MTo become a researc#4base"
international com$any.M
)anbaxy ma"e goo" on its mission44by t#e mi""le o( t#e next "eca"e0 nearly ,. $ercent o( its
sales came (rom outsi"e o( !n"ia. As a (irst ste$0 t#e com$any launc#e" a ne/ 2oint venture0
in C#ina0 bac3ing its entry into t#at mar3et /it# a $ro"uction (acility in Buang1#ou. T#e
(ollo/ing year0 t#e com$any establis#e" subsi"iaries in Lon"on0 Englan"0 an" in )aleig#0
Nort# Carolina. !n 1--'0 t#e com$any ste$$e" u$ its D.S. $resence /it# t#e $urc#ase o( O#m
Laboratories !nc.0 /#ic# gave t#e com$any its (irst manu(acturing $lant in t#at mar3et.
)anbaxy t#en launc#e" construction o( a ne/ an" state4o(4t#e4art manu(acturing /ing0
/#ic#0 com$lete" t#at year0 gaine" F5A a$$roval.
T#is ne/ (acility enable" )anbaxy to ste$ u$ its $resence in t#e Dnite" States0 an" in 1--,
t#e com$any began mar3eting its generic $ro"ucts un"er its o/n bran" name. T#at year0 in
a""ition0 t#e com$any (ile" an a$$lication to begin P#ase ! clinical testing on its (irst in4
#ouse "evelo$e" NCE. T#e (ollo/ing year0 t#e com$any=s N55S e((orts $ai" o(( as /ell0
/#en Bayer ac>uire" t#e rig#ts to mar3et )anbaxy=s single "aily4"osage ci$ro(loxacin
(ormulation.
)anbaxy=s international ex$ansion continue" as /ell0 /it# t#e launc# o( mar3eting o$erations
in Bra1il. As t#e largest $#armaceuticals mar3et in Latin America0 t#at country /as t#e
cornerstone o( t#e com$any=s $lans to ex$an" t#roug#out t#e region. )anbaxy also ex$an"e"
in Euro$e0 /it# t#e agreement in ... to ac>uire Bayer=s Bermany4base" generics business0
Basics. T#e com$any also a""e" $ro"uction $lants in 7alaysia an" T#ailan".
Parvin"er Sing# "ie" in 1--- an" longtime rig#t#an" man 5.S. Brar too3 over as com$any
lea"er0 naming (amily outsi"er Brian Tem$est as com$any $resi"ent. T#e ne/ management
team continue" Sing#=s ex$ansion strategy0 o$ening a ne/ manu(acturing $lant in :ietnam in
..1.
)anbaxy also soug#t ne/ alliances0 an" in ..% t#e com$any reac#e" a global "rug
"iscovery an" "evelo$ment $artners#i$ /it# BlaxoSmit#Jline. T#at agreement calle" (or
Blaxo to #an"le t#e later4stage "evelo$ment $rocess (or )anbaxy create" molecules. T#e
com$any=s international ex$ansion also too3 a ma2or ste$ (or/ar" at t#e en" o( ..0 /#en it
agree" to ac>uire )PB ;Aventis< in France0 t#at country=s lea"ing generic "rugs $ro"ucer.
)anbaxy=s sales #a" by t#en to$$e" t#e E1 billion mar30 $lacing t#e com$any not only as t#e
lea"er in !n"ia=s $#armaceuticals in"ustry0 but also among t#e ran3s o( t#e /orl"=s to$ 1..
$#armaceuticals com$anies. )anbaxy also boaste" a $lace among t#e /orl"=s to$ ten generic
"rugs $ro"ucers. !n a""ition0 t#e com$any #a" a"vance" a gro/ing number o( its o/n NCE
an" N55S molecules into clinical testing. T#e com$any=s transition into researc#4base"
$ro"uct "evelo$ment /as seen as crucial as !n"ia announce" its intention to en(orce
international "rug $atents at t#e beginning o( ..'.
)anbaxy a$$eare" $re$are" to meet t#is c#allenge0 #o/ever0 an" con(i"ently set its sig#ts on
boosting its annual sales $ast E billion by ..+ an" to more t#an E' billion by t#e beginning
o( t#e next "eca"e. !nternational gro/t# remaine" an essential $art o( t#at strategy. T#e
com$any began negotiations (or a ma2or ac>uisition in Bermany at t#e en" o( ..&0 /#ic#
/as ex$ecte" to be com$lete" in ..'. T#e com$any also launc#e" construction o( a ne/
E1.. million $ro"uction (acility in Bra1il. 7ean/#ile0 )anbaxy continue" to increase its
researc# an" "evelo$ment bu"get0 /it# t#e goal o( generating as muc# as &. $ercent o( its
revenues (rom its in4#ouse innovations by t#e .1.s. )anbaxy ex$ecte" to remain !n"ia=s
"rug lea"er into t#e ne/ century.
Princi$al Subsi"iaries
Basics BmbA ;Bermany<K Bu(ic P#arma Lt". ;-,?<K O#m Laboratories !nc. ;Dnite" States<K
)anbaxy ;Aong Jong< Lt".K )anbaxy ;7alaysia< S"n. B#". ;'*.'?<K )anbaxy
;Net#erlan"s< B.:.K )anbaxy ;S.A.< Pro$rietary Lt".K )anbaxy ;DJ< Lt".K )anbaxy 5o Brasil
Lt"a.K )anbaxy 5rugs an" C#emicals Com$anyK )anbaxy 5rugs Lt".K )anbaxy Egy$t Lt".K
)anbaxy Euro$e Lt". ;Dnite" Jing"om<K )anbaxy Farmaceutica Lt"a. ;Bra1ilK +.?<K
)anbaxy Fine C#emicals Lt".K )anbaxy France SASK )anbaxy !relan" Lt".K )anbaxy Nigeria
Lt". ;,&.,-?<K )anbaxy Panama0 S.A.K )anbaxy P#armaceuticals !nc. ;Dnite" States<K
)anbaxy Polan" S$. 1.o.o.K )anbaxy P)P ;Peru< S.A.C.K )anbaxy Dnic#em Com$any Lt".
;T#ailan"K ,,.'*?<K )anbaxy DSA0 !nc.K )anbaxy :ietnam Com$any Lt".K )anbaxy
;Buang1#ou C#inaK ,%?<K )anbaxy0 !nc. ;Dnite" States<K )anc#em !nc. ;Dnite" States<K
)anlab !nc. ;Dnite" States<K )anP#arm !nc. ;Dnite" States<K )excel P#armaceuticals Lt".K
Solus P#armaceuticals Lt".K Dnic#em 5istributors ;T#ailan"K --.-*?<K :i"yut !nvestments
Lt".K :i"yut Travel Services Lt".
Princi$al Com$etitors
)PB Enter$risesK BlaxoSmit#Jline Consumer Aealt#care Lt".K East !n"ia P#armaceutical
Cor3s Lt".K 5r. )e""y=s Laboratories Lt".K Ci$la Lt".K Conce$t P#armaceuticals Lt".K
J#an"el/al Laboratories Lt".K 5abur !n"ia Lt".
1< Current )atios N Current assets
Current liabilities
Iear .. ..% ..& ..' ..*
)atios %.*.? &.1*? .++? %.11? %.&*?
!nter$retation64
T#e current ratio o( t#e
(irm measures t#e s#ort
term solvency 0t#at is its
ability to meet t#e s#ort
term obligations. !n t#e
(ollo/ing gra$# /e can
say t#at t#e (irm9s current ratio is increasing in (irst t/o years an" #as "ecrease" in t#ir" year
an" again increase in t#e subse>uent years . T#is s#o/s t#at t#e (irm #as t#e ability to meet
its current obligations.
T#is also means t#at t#e com$any is bloc3ing u$ t#e assets an" are not been utili1e" in t#e
ot#er investments.
< Ouic3 ratiosN Ouic3 assets
Current liabilities
Iear .. ..% ..& ..' ..*
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
Ratios
)atios 1.*& ..-- ..-, 1.* 10&-
!nter$retation64
Ouic3 ratios are use" to measure t#e (irm9s ability to service its s#ort term liabilities .(rom
t#e (ollo/ing gra$# /e can say t#at t#e (irm #as #ig# liability servicing ca$acity in t#e (irst
year 0.but it #as "ecrease" in next t/o years. An" t#ereby increase" in t#e subse>uent years.
T#is s#o/s t#at t#e com$any #as t#e ability to meet its liabilities.
%< !nventory turnover ratio N cost o( goo"s sol"
Average inventory
Iear .. ..% ..& ..' ..*
)atios &..% %.,& %.*+ %.*. %.+%
!nter$retation64
T#is means t#at t#e inventory in t#e (irst year is been sol" very (ast. An" t#ere is an "ecrease
in t#e movement o( t#e inventories but it slig#tly increase" in t#e last year. T#is may be a
goo" sign to t#e com$any t#at it may still increase t#e inventory movement in t#e next
subse>uent years.
&< Bross $ro(it 7argin N gross $ro(it
Sales
Iear .. ..% ..& ..' ..*
)atios '.,? ,.&1? 1-.-'? ,.--? 1&.-,?
!nter$retation64
T#e gross $ro(it measures t#e relation bet/een t#e sales an" $ro(its .As t#ere /as increase in
t#e gross $ro(its (rom .. to ..% it /as a goo" sign to t#e com$any 0but it "ecrease" in
t#e subse>uent years an" again increase" in t#e last year .it /as not muc# goo" as com$are"
to t#e $revious years.
'< Net $ro(it margin N $ro(it a(ter tax
Sales
Iear .. ..% ..& ..' ..*
)atios 11.%. .&- 1&.* *.% -.%+
!nter$retation64
T#e net $ro(it margin is t#e in"icative o( t#e managements ability to o$erate t#e business
/it# su((icient success. !n t#e (ollo/ing gra$# /e can see t#at t#e net $ro(it increase" (rom
.. to ..% .it /as normal in ..& .But at t#e subse>uent years t#e net $ro(it "ecrease" .
T#is is a goo" sign to t#e com$any as it can earn more return on investments i( it #as #ig#
rate inventory turn over.
*< O$erating $ro(it ratio N EB!T
Sales
Iear .. ..% ..& ..' ..*
)atios &.*,? +.**? 1+.%,? '.*-? 1..-1?
!nter$retation64
+< Cost o( goo"s sol" ratio N cost o( goo"s sol" @1..
Net sales
Iear .. ..% ..& ..' ..*
)atios
+-.--? +&.&%? ,.+1? -.? ,1.,%?
!nter$retation64
T#e cost o( goo"s sol" ratio s#o/s /#at $ercentage s#are o( sales is consume" by cost o(
goo"s sol" 0 an" /#at $ro$ortion is available (or meeting ex$enses .!n t#e (ollo/ing (igure
/e can se t#at t#e cost o( goo"s sol" ratio is continuously increasing .
,< )eturn on Assets N PATP !nterest @1..
Average (ixe" assets
Iear .. ..% ..& ..' ..*
)atios +.*&? -*..,? *,.1.? &..+? %%.%%?
!nter$retation64
T#e )OA measures t#e $ro(itability o( t#e total (un"s .#ere in t#e (ollo/ing (igure /e can
say t#at $ercentage o( return on assets is gra"ually "ecreasing year a(ter year.
-< )eturn on ca$ital em$loye" N Pro(it a(ter tax @1..
Average total ca$ital em$loye"
Iear .. ..% ..& ..' ..*
)atios %&.',? %+.''? 1.1'? +.%-? ,.'1?
!nter$retation64
T#e )OCE is similar to t#e )OA .Aere t#e $ro(its are relate" to t#e total ca$ital em$loye".
Aig#er t#e ratio0 more e((icient is t#e use o( ca$ital em$loye" .But in t#e (ollo/ing gra$#
/e can say t#at t#e ratio is gra"ually "ecreasing 0t#is means t#at t#e (irm is not utili1ing t#e
ca$ital e((iciently
1.< EPS N Net $ro(it available to t#e e>uity s#are#ol"ers @1..
Number o( or"inary s#ares outstan"ing
Iear .. ..% ..& ..' ..*
)atios %.&%? ..'&? &.++? 1.1,? 1.1?
!nter$retation64
T#e EPS in"icates t#e earnings o( a s#are .by t#e (ollo/ing gra$# it is clear t#at t#e EPS is
Totally "ecrease" (rom .. to ..% .But t#ere /as a "rastic rise in t#e EPS in ..& 0an"
again t#ere /as "ecrease in t#e subse>uent years.
11< 5HE )atio N Total "ebt
S#are#ol"ers e>uity
Iear .. ..% ..& ..' ..*
)atios &%.%%? &,.-+? '-.+%? -1.%+? 1,,.%'?
!nter$retation64
T#e "ebt e>uity ratio is t#e relations#i$ bet/een t#e borro/e" (un"s an" t#e o/ner9s
ca$ital. Aere in t#e (ollo/ing gra$# it is clear t#at t#e "ebt e>uity ratio is increasing .it means
t#at t#e cre"itors are $utting less money o( t#eir o/n an" #ence it is a "anger sign to t#e
com$any.
1< !nterest coverage N EB!T
!nterest
Iear .. ..% ..& ..' ..*
)atios %'.1%? &.'? *'.*+? 1..%? 1..&.?
!nter$retation64
T#is ratio measures t#e "ebt servicing ca$acity o( t#e (irm .(rom t#e (ollo/ing gra$# 0t#e
interest coverage ratio in more in t#e year .. but since t#en it /ent on gra"ually
"ecreasing. T#is coul" be a "anger sign (or t#e (irm t#at it is using excessive "ebt an" "oes
not #ave t#e ca$acity to assure $ayment o( t#e interest to t#e cre"itors .
1%< 5ivi"en" coverage N EAT
Pre(erence "ivi"en"
Iear .. ..% ..& ..' ..*
)atios %.',? .,'? 1.*+? ..+.? 1..?
!nter$retation64
T#is ratio measures t#e "ivi"en" $ayment ability o( t#e (irm /#ic# carry a state" rate o(
return to t#e s#are#ol"ers.Aig#er t#e ratio better /ill be to t#e s#are#ol"ers . but #ere t#e
"ivi"en" $ayment ability is "ecreasing gra"ually year a(ter year.
1&< 5ivi"en" $ayout ratio N 5ivi"en" $ai" @1..
EPS
Iear .. ..% ..& ..' ..*
)atios '..*? '.1'? *.*? .*,? .*1?
!nter$retation64
T#is states t#e (irms ability to $ay t#e "ivi"en"s to t#e s#are#ol"ers.Even #ere t#e $ayment
ratio is "ecreasing . T#e (irm #ere.is not able to $ay t#e "ivi"en"s .t#e $ayout ratio is
"ecreasing gra"ually every year.
1'< Total assets turnover ratio N cost o( goo"s sol" @1..
Average total assets
Iear .. ..% ..& ..' ..*
)atios .1,? .*? .-*? .,*? .+%?
!nter$retation64
T#e assets turnover ratio measures t#e e((iciency o( t#e (irm in in managing an" utili1ing
t#e assets. Aig#er t#e turnover more e((icient is t#e management. So (rom t#is gra$# /e can
say t#at t#e (irm is more e((icient in managing its assets as t#e ratio is increasing every year.
1*< Fixe" assets turnover ratio N cost o( goo"s sol" @1..
Average (ixe" assets
Iear .. ..% ..& ..' ..*
)atios .1&? %.'? .'? ..1? 1.+'?
!nter$retation64
As t#e (igure s#o/s0 t#ere is "ecrease in t#e ratio o( assets turn over .Aence t#e (irm is not
e((icient in managing an" utili1ing t#e (ixe" assets.
1+< Current assets turnover N cost o( goo"s sol" @1..
Average current assets
Iear .. ..% ..& ..' ..*
)atios 1.'-? .%,? 1.++? 1.+? 1.+.?
!nter$retation64
T#e current assets turnover ratio measures t#at #o/ >uic3ly t#e s#ort term obligations can be
met. Aig# t#e ratio 0more e((icient is t#e (irm9s ability to meet t#e s#ort term obligations. !n
t#e (ollo/ing gra$# it is s#o/n t#at t#ere is increase in t#e current assets turnover ratio.
1,< Ca$ital turnover ratio N cost o( goo"s sol"
Average ca$ital em$loye"
Iear .. ..% ..& ..' ..*
)atios ..+-? 1.,.? 1.'? 1.1*? ..-?
!nter$retation64
T#is ratio measures t#e relations#i$ bet/een cost o( goo"s sol" an" average ca$ital
em$loye". An" #o/ (ast is t#e utili1ation o( t#e ca$ital. t#is also measures /#at is t#e cost
o( goo"s sol"..From t#e gra$# /e can say t#at t#ere is "ecrease in t#e ratios 0so it is not a
goo" sign to t#e com$any. !t can still $er(orm better .
1-< 5ebtors turnover ratio N Total sales
5rs PBH)
Iear .. ..% ..& ..' ..*
)atios %.,%? +..%? &.&'? &.? %.-1?
!nter$retation64
T#e "ebtors turnover ratio measures t#e relation bet/een t#e total sales an" "ebtors.
!t means t#at t#e "ebtors are ex$ecte" to $ay /it#in t#e $rescribe" $erio" . #ig# t#e ratio
0more e((icient is t#e (irm in collecting t#e "ebt (rom t#e "ebtors. Aere in t#e (ollo/ing gra$#
/e can see t#at t#e ratio is #ig# in ..% an" gra"ually "ecrease" in t#e subse>uent years .
t#is is not goo" on t#e $art o( t#e com$any.
.< )etention ratio N )etaine" earnings
PAT
Iear .. ..% ..& ..' ..*
)atios +.1? *&.--? &..&? &1.&'? 1*.+*?
!nter$retation64
)etention ratio measures t#e $ercentage o( earnings retaine" by t#e com$any. Aig# t#e ratio0
more e((icient is t#e com$any is retaine" earnings. So (rom t#e (ollo/ing gra$# it is clear t#at
t#e retaine" earnings is "ecrease" (rom .. to ..* gra"ually . Aence t#e com$any is sai"
to be "istributing t#e "ivi"en"s /it#out retaining any reserves. !t is a"vantageous (rom t#e
$oint o( vie/ o( s#are#ol"ers.
1< )eturn on e>uity N PAT @1..
S#are#ol"ers (un"
Iear .. ..% ..& ..' ..*
)atios %*.-,? %&.*? 1..,? -.&1? 1*.1-?
!nter$retation 64
T#e )eturn on e>uity s#o/s #o/ muc# returns is being earne" .t#is is ma"e (rom t#e $oint
o( vie/ o( t#e s#are#ol"ers .i( t#e return on e>uity is more t#en it is sai" to be t#e most
"eman"e" s#ares in t#e mar3et.
But in t#e (ollo/ing gra$# t#ere /as "ecrease in t#e t#e ratio (rom .. to ..& . But t#ere
/as slig#t rise in t#e year ..*.
< Boo3 :alue N Net /ort#
No. o( s#ares oHs
Iear .. ..% ..& ..' ..*
)atios 1... 1.' 1.%& ..*% ..*%
!nter$retation64
T#e Boo3 value is too #ig# in t#e year ..&.!t #as increase" (rom .. to ..*.But t#ere
/as "ecrease in t#e year ..' an" ..*.Bot# t#e years #ave a constant ratio.
%< PE )atio; Pros$ective< N 7ar3et $rice
EPS
Iear .. ..% ..& ..' ..*
)atios '.'*? 11'.&,? 1-.+.? ,'.&-? %'.+%?
!nter$retation64
T#e PHE )atio ;Pros$ective< /as #ig# in t#e year ..% . an" in t#e year ..& t#ere /as a
"rastic c#ange to 1-.+.? . !t increase" in t#e ..' an" again "ecrease" in ..* .t#is is only
because o( t#e c#anges in t#e mar3et $rice every year.
&< PE )atio
etros$ective< N 7ar3et $rice
Boo3 value
Iear .. ..% ..& ..' ..*
)atios ,*.-? &-.,,? +..1%? 1*.? *,.*?
!nter$retation64
T#e PHE )atio ;retros$ective< is very #ig# in t#e year ..'. !t "ecrease" (rom year .. to
..% an" again increase" (rom ..& to ..' an" it "ecrease" in ..*.
CAB) ;sales< N ; Sales in .. <Q1H& @1..
Sales in ..*
N ,-&.% Q..' @1..
&-',+.1
N 1.,& .r 1,&?
CAB) ;EPS< N ;EPS in ..< Q1H&@1..
EPS in ..*
N ;%.&1<Q..'@1..
1.&1
N ..-'* or -.'*?
latility o( )OE N )ange o( )OE over a $erio" ..' to ..
Average o( )OE over a $erio"
N %*.-, F -.&1
%.',
N 1.1*
5ecom$ose )OE N PB!T @ SALES @ PBT @ PAT @ ASSETS
SALES ASSETS PB!T PBT NETCO)TA
N .1%.* @ %'%**.' @ .1%.* @ %+.. @ 11%..-*
%'%**.' 11%..-* .1%.* .1%.* %++..1-
N ...'*- @ %.1&% @ 1@ 1.11 @ ..&
N ...+%1 O) +.%1?
Average )etention ratio N )etention ratio in last % years
%
N ..&. P ..&1 P ..1*
%
N ..%%%
Average $ayout N 1 F ..%%%
N ..*+**
Ex$ecte" gro/t# rate o( 5ivi"en" N Average retention ratio @ Average return on e>uity
!n last % years in last % years
N ..&. P ..&1 P ..1* @ 1.., P-.&1 P 1*.1-
% %
N ..%%% @ 1'.'*
N '..%?
PE )atio as $er Constant 5ivi"en" 7o"el N
Average $ayout ratio
Average retention ratio F Ex$ecte" Bro/t# )ate o( 5ivi"en"
N ..*+**
..&** F ...'.%
N ..*+**
..&1'+
N 1.*
:alue Anc#or N Ex$ecte" EPS @ PE )atio
@ 1.*
!ntro"uction to Ci$la64
T#e com$any /as (oun"e" in 1-%' by J#/a2a Ab"ul Aamie"0 an" its c#airman to"ay is
Iusu( Aamie" ;b. 1-%*<0 t#e (oun"er=s el"est son. Ci$la0 originally (oun"e" as T#e C#emical0
!n"ustrial 8 P#armaceutical Laboratories is a $rominent !n"ian $#armaceutical com$any0
best43no/n outsi"e its #ome country (or $ro"ucing lo/4cost anti4A!5S "rugs (or A!:4
$ositive $atients in "evelo$ing countries. Ci$la ma3es "rugs to treat car"iovascular "isease0
art#ritis0 "iabetes0 /eig#t control0 "e$ression an" many ot#er #ealt# con"itions0 an" its
$ro"ucts are "istribute" in more t#an 1,. countries /orl"/i"e.
R1S
Among t#e #un"re"s o(
generic me"ications it $ro"uces (or international "istribution are atorvastatin0 amlo$i"ine0
(luoxetine0 venla(axine #y"roc#lori"e an" met(ormin.
To"ay ;..+<0 Ci$la is t#e /orl"=s largest manu(acturer o( antiretroviral "rugs ;A):s< to
(ig#t A!:HA!5S0 as measure" by units $ro"uce" an" "istribute" ;multinational bran"4name
"rugs are muc# more ex$ensive0 so in money terms Ci$la me"icines are $robably some/#ere
"o/n t#e list<. )oug#ly &.? o( A!:HA!5S $atients un"ergoing antiretroviral t#era$y
/orl"/i"e ta3e Ci$la "rugs. )an3e" t#ir" in Beneric mar3et s#are statistics in Sout# A(rican
Private Sector.
Because !n"ian la/ (rom 1-+ #as allo/e" no ;en"4$ro"uct< $atents on "rugs0 an" $rovi"e"
(or com$ulsory licensing0 Ci$la /as able to manu(acture me"icines /#ic# en2oy $atent
mono$oly in certain ot#er countries ;$articularly t#ose /#ere large0 multinational
$#armaceutical com$anies are base"<. By "oing so0 as /ell as by ma3ing
an executive "ecision not to ma3e $ro(its on A!5S me"ication0 Ci$la re"uce" t#e cost o(
$rovi"ing antiretrovirals to A!5S $atients (rom E10... an" beyon" ;mono$oly $rices
c#arge" by international $#arma conglomerates< "o/n to aroun" E%.. $er year. To"ay t#ey
are able to "o so (or un"er E1'. $er $atient $er year. C#ile t#is sum remains out o( reac# (or
many millions o( $eo$le in T#ir" Corl" countries0 government an" c#aritable sources o(ten
are in a $osition to ma3e u$ t#e "i((erence (or "estitute $atients.
T#e customary treatment o( A!5S consists o( a coc3tail o( t#ree "rugs. Ci$la $ro"uces an all4
in4one $ill calle" Triomune /#ic# contains all t#ree substances ;Lamivu"ine0 stavu"ine an"
Nevira$ine<0 somet#ing "i((icult else/#ere because t#e t#ree $atents are #el" by "i((erent
com$anies. One more $o$ular (ixe" "ose combination is t#ere0 /it# t#e name 5uovir4N. T#is
contains Lamivu"ine0 Ti"ovu"ine an" Nevira$ine
1< Current )atios N Current assets
Current liabilities
Iear .. ..% ..& ..' ..*
)atios 1.*.? 1.&-? .,+? .+'? .-+?
!nter$retation64
T#e current ratio o( t#e (irm measures t#e s#ort term solvency 0t#at is its ability to meet t#e
s#ort term obligations. !n t#e (ollo/ing gra$# /e can say t#at t#e (irm9s current is
increasing in (irst year an" #as increase" in t#ir" year an" again increase in t#e subse>uent
years . T#is s#o/s t#at t#e (irm #as t#e ability to meet its current obligations.
T#is s#o/s increase (rom ..& to ..* suse>uently.
T#is also means t#at t#e com$any is bloc3ing u$ t#e assets an" are not been utili1e" in t#e
ot#er investments.
< Ouic3 ratiosN Ouic3 assets
Current liabilities
Iear .. ..% ..& ..' ..*
)atios ..*1? ..*.? 1.%&? 1.1? 1.&&?
!nter$retation64
Ouic3 ratios are use" to measure t#e (irm9s ability to service its s#ort term liabilities .(rom
t#e (ollo/ing gra$# /e can say t#at t#e (irm #as lo/ liability servicing ca$acity in t#e (irst
year 0.but it #as increase" in next t/o years. An" t#ereby increase" in t#e subse>uent years.
T#is s#o/s t#at t#e com$any #as t#e ability to meet its liabilities.
%< !nventory turnover ratio N cost o( goo"s sol"
Average inventory
Iear .. ..% ..& ..' ..*
)atio ..%.? ..1? ..? ..1? ...?
!nter$retation64
T#is means t#at t#e inventory in t#e (irst year is been sol" very (ast. An" t#ere is an "ecrease
in t#e movement o( t#e inventories. T#is may be a ba" sign to t#e com$any inventory
movement in t#e next subse>uent years is very lo/.
&< Bross $ro(it 7argin N gross $ro(it
Sales
Iear .. ..% ..& ..' ..*
)atios -.&%? %&.1%? %,..-? &&...? &&.-?
!nter$retation64
T#e gross $ro(it measures t#e relation bet/een t#e sales an" $ro(its .As t#ere /as increase in
t#e gross $ro(its (rom .. to ..* it /as a goo" sign to t#e com$any because t#ere is
subse>uent increase in t#e gross $ro(it
7argin.
'< Net $ro(it margin N $ro(it a(ter sales
Sales
Iear .. ..% ..& ..' ..*
)atios 1*.&'? 1'.&-? 1&.**? 1*.&-? 1,.++?
!nte$retation64
T#e net $ro(it margin is t#e in"icative o( t#e managements ability to o$erate t#e business
/it# su((icient success. !n t#e (ollo/ing gra$# /e can see t#at t#e net $ro(it increase" (rom
.. to ..* .it /as normal in ..&.But at t#e subse>uent years t#e net $ro(it increase" .
T#is is a goo" sign to t#e com$any as it can earn more return on investments as it #as #ig#
rate inventory turn over.
*< O$erating $ro(it ratio N EB!T
Sales
Iear .. ..% ..& ..' ..*
)atios 1.*'? 1-.'&? 1-.%? ..+? 1.-%?
!nter$retation64
T#e o$erating $ro(it ratio s#o/s t#e relation bet/een EB!T an" Sales .Aere (rom t#e
(ollo/ing gra$# /e can say t#at t#e o$erating ratio is increase" (rom .. to ..*
subse>uently.t#is is a goo" sign to t#e com$any as it #as increase its o$erating $ro(it ratio
/#ic# is be(ore tax.
+< Cost o( goo"s sol" ratio N cost o( goo"s sol" @1..
Net sales
Iear .. ..% ..& ..' ..*
)atios +.-? +.%? +..? *.%? *.1?
!nter$retation64
T#e cost o( goo"s sol" ratio s#o/s /#at $ercentage s#are o( sales is consume" by cost o(
goo"s sol" 0 an" /#at $ro$ortion is available (or meeting ex$enses .!n t#e (ollo/ing (igure
/e can see t#at t#e cost o( goo"s sol" ratio is continuously "ecreasing . So t#is is a goo"
sign to t#e com$any as t#ere is lo/ cost incurre" (or sales.
,< )eturn on Assets N PATP !nterest @1..
Average (ixe" assets
Iear .. ..% ..& ..' ..*
)atios 1.*? ,,.? *-...? *&.,*? *,.-'?
!nter$retation64
T#e )OA measures t#e $ro(itability o( t#e total (un"s .#ere in t#e (ollo/ing (igure /e can
say t#at $ercentage o( return on assets is gra"ually "ecreasing year a(ter year.
-< )eturn on ca$ital em$loye" N Pro(it a(ter tax @1..
Average total ca$ital em$loye"
Iear .. ..% ..& ..' ..*
)atios '.&&? %.+? %.%? '.&1? ,.-?
!nter$retation64
T#e )OCE is similar to t#e )OA .Aere t#e $ro(its are relate" to t#e total ca$ital em$loye".
Aig#er t#e ratio0 more e((icient is t#e use o( ca$ital em$loye" .But in t#e (ollo/ing gra$#
/e can say t#at t#e ratio is gra"ually increasing 0t#is means t#at t#e (irm utili1ing t#e ca$ital
e((iciently
1.< EPS N Net $ro(it available to t#e e>uity s#are#ol"ers @1..
Number o( or"inary s#ares outstan"ing
Iear .. ..% ..& ..' ..*
)atios %.- &.1 '..- 1%.* ..1-
!nter$retation64
T#e EPS in"icates t#e earnings o( a s#are .by t#e (ollo/ing gra$# it is clear t#at t#e EPS is
Totally increase" (rom .. to ..* .But t#ere /as a "rastic rise in t#e EPS in ..* an" .
t#is s#o/s t#at t#e s#are#ol"ers earn better "ivi"en"s
11< 5HE )atio N Total "ebt
S#are#ol"ers e>uity
Iear .. ..% ..& ..' ..*
)atios '&.1.? *&.*.? +..&? *.**? +..%&?
!nter$retation64
T#e "ebt e>uity ratio is t#e relations#i$ bet/een t#e borro/e" (un"s an" t#e o/ner9s ca$ital.
Aere in t#e (ollo/ing gra$# it is clear t#at t#e "ebt e>uity ratio is increasing .it means t#at t#e
cre"itors are $utting less money o( t#eir o/n an" #ence it is a "anger sign to t#e com$any.
1< !nterest coverage N EB!T
!nterest
Iear .. ..% ..& ..' ..*
)atios 1&.+%? 1,..? %,.,+? *+.&1? *.1'?
!nter$retation64
T#is ratio measures t#e "ebt servicing ca$acity o( t#e (irm .(rom t#e (ollo/ing gra$# 0t#e
interest coverage ratio in more in t#e year .. but since t#en it /ent on gra"ually
increasing. T#is coul" be a goo" sign (or t#e (irm t#at it is not using excessive "ebt an" #ave
t#e ca$acity to assure $ayment o( t#e interest to t#e cre"itors .
1%< 5ivi"en" coverage N EAT
Pre(erence "ivi"en"
Iear .. ..% ..& ..' ..*
)atios 11.&*? +.&&? *.+%? '.+? *.+*?
!nter$retation64
T#is ratio measures t#e "ivi"en" $ayment ability o( t#e (irm /#ic# carry a state" rate o(
return to t#e s#are#ol"ers.Aig#er t#e ratio better /ill be to t#e s#are#ol"ers . but #ere t#e
"ivi"en" $ayment ability is "ecreasing gra"ually year a(ter year.
1&< 5ivi"en" $ayout ratio N 5ivi"en" $ai" @1..
EPS
Iear .. ..% ..& ..' ..*
)atios *.-? 1..1-? 11.+*? **..+? '1.-*?
!nter$retation64
T#is states t#e (irms ability to $ay t#e "ivi"en"s to t#e s#are#ol"ers.Aere t#e $ayment ratio is
increasing . T#e (irm #ere is able to $ay t#e "ivi"en"s .T#e $ayout ratio is increasing
gra"ually every year.
1'< Total assets turnover ratio N cost o( goo"s sol" @1..
Average total assets
Iear .. ..% ..& ..' ..*
)atios 1.1+? ..-*? ..-%? ..,? ..,1?
!nter$retation64
T#e assets turnover ratio measures t#e e((iciency o( t#e (irm in managing an" utili1ing t#e
assets. Aig#er t#e turnover more e((icient is t#e management. So (rom t#is gra$# /e can say
t#at t#e (irm is not e((icient in managing its assets as t#e ratio is "ecreasing every year.
1*< Fixe" assets turnover ratio N cost o( goo"s sol" @1..
Average (ixe" assets
Iear .. ..% ..& ..' ..*
)atios ..&1? ..%1? ..,? ..1? ..1-?
!nter$retation64
As t#e (igure s#o/s0 t#ere is "ecrease in t#e ratio o( assets turn over .Aence t#e (irm is not
e((icient in managing an" utili1ing t#e (ixe" assets.
!t is not a goo" sign to t#e com$any.
1+< Current assets turnover N cost o( goo"s sol" @1..
Average current assets
Iear .. ..% ..& ..' ..*
)atios ..1? ..1-? ..1? ..11? ..11?
!nter$retation64
T#e current assets turnover ratio measures t#at #o/ >uic3ly t#e s#ort term obligations can be
met. Aig# t#e ratio 0more e((icient is t#e (irm9s ability to meet t#e s#ort term obligations. !n
t#e (ollo/ing gra$# it is s#o/n t#at t#ere is "ecrease in t#e current assets turnover ratio. !n
t#e year .. to ..% t#ere increase in t#e ratios 0but t#ere is a "ecrease in t#e ratios (rom
..& on/ar"s.
1,< Ca$ital turnover ratio N cost o( goo"s sol"
Average ca$ital em$loye"
Iear .. ..% ..& ..' ..*
)atios 1...,? -.,.? ,.*? ,.&,? 1%.%*?
!nter$retation64
T#is ratio measures t#e relations#i$ bet/een cost o( goo"s sol" an" average ca$ital
em$loye". An" #o/ (ast is t#e utili1ation o( t#e ca$ital. t#is also measures /#at is t#e cost
o( goo"s sol"..From t#e gra$# /e can say t#at t#ere is increase in t#e ratios (rom .. to
..* 0so it is a goo" sign to t#e com$any. !t is $er(orming $er(orm better .
1-< 5ebtors turnover ratio N Total sales
5ebtors
Iear .. ..% ..& ..' ..*
)atios '.*.? &.&-? &.1-? &.? %.*-?
!nter$retation64
T#e "ebtors turnover ratio measures t#e relation bet/een t#e total sales an" "ebtors.
!t means t#at t#e "ebtors are ex$ecte" to $ay /it#in t#e $rescribe" $erio" . #ig# t#e ratio
0more e((icient is t#e (irm in collecting t#e "ebt (rom t#e "ebtors. Aere in t#e (ollo/ing gra$#
/e can see t#at t#e ratio is #ig# in .. an" gra"ually "ecrease" in t#e subse>uent years .
t#is is not goo" on t#e $art o( t#e com$any.
.< )etention ratio N )etaine" earnings
PAT
Iear .. ..% ..& ..' ..*
)atios ..,,? ..,%? ..,1? ..+,? ..,?
!nter$retation64
T#e retention ratio is increase" (rom .. to ..& an" "ecrease" in t#e year ..' .but t#ere
/as again rise in t#e ratio in ..* .t#is s#o/s t#at t#e com$any is stable in retaining t#e
earnings even a(ter $aying taxes.
1< )eturn on e>uity N PAT @1..
)etaine" earnings
Iear .. ..% ..& ..' ..*
)atios 1.-+? +.,%? &.*? *.%*? %..*%?
!nter$retation64
T#e )eturn on e>uity s#o/s #o/ muc# returns is being earne" .t#is is ma"e (rom t#e $oint
o( vie/ o( t#e s#are#ol"ers .i( t#e return on e>uity is more t#en it is sai" to be t#e most
"eman"e" s#ares in t#e mar3et.
But in t#e (ollo/ing gra$# t#ere /as increase in t#e ratio (rom .. to ..* .
< Boo3 :alue N Net /ort#
No. o( s#ares oHs
Iear .. ..% ..& ..' ..*
)atios 1&.+- 1+.,& 1..+ '.1* *.'
!nter$retation64
From t#e (ollo/ing gra$# it is clear t#at t#e boo3 value o( t#e s#ares is "ecrease" (rom ..
to ..' . an" t#ere /as a slig#t rise in t#e boo3 value.it is because o( t#e increase in t#e
number o( s#ares.(rom ..' on/ar"s.
%< PE )atio; Pros$ective< N 7ar3et $rice
EPS
Iear .. ..% ..& ..' ..*
)atios .*. 1.+% .%, 1.' .%*
!nter$retation64
T#e PHE )atio ;$ros$ective< "ecrease" (rom .. to ..% .!t increase" in ..& an" again
t#ere /as "ecrease in ..' .!n ..* t#e ratio again increase".T#is is because o( t#e c#anges
in t#e mar3et $rices.
&< PE )atioetros$ective< N 7ar3et $rice
Boo3 value
Iear .. ..% ..& ..' ..*
)atios *,.+, &...1 ''.+1 &-.'+ 1...&-
!nter$retation64
T#e PHE )atio ;$ros$ective< "ecrease" (rom .. to ..& .An" again t#ere /as "ecrease in
..' .!n ..* t#e ratio again increase".T#is is because o( t#e c#anges in t#e mar3et $rices.
CAB) ;sales< N ; Sales in ..+ <Q1H& 41 @1..
Sales in ..%<
N ;%+*%.+< Q..' 41@1..
1'--...
N %.,*?
CAB) ;EPS< N ;EPS in ..+< Q1H&41@1..
EPS in ..%<
N ;1.&-<Q..'41@1..
&.11
N %..%?
latility o( )OE N )ange o( )OE over a $erio" ..+to ..%
Average o( )OE over a $erio"
N 1.-+ 4*.%*
*.
N 4..1*
5ecom$ose )OE N PB!T @ SALES @ PBT @ PAT @ ASSETS
SALES ASSETS PB!T PBT NETCO)TA
N '1&*.1& @ &,.,+ @ '1&*.1& @ &.-*.& @ 1,%%.++
&,.,+ 1,%%.++ '1&*.1& '1&*.1& 1''*.*%
N .. @ 1.%' @ 1@ ..+- @ 1.1+
N &.-'?
Average )etention ratio N )etention ratio in last % years
%
N ..,1 P..+, P ..,
%
N ..,.%
Average $ayout N 1 F ..,.%
N ..1-+
Ex$ecte" gro/t# rate o( 5ivi"en"N Avg reten ratio @ Avg return on e>
!n last % years in last % years
N ..,1 P..+, P.., @ &.* P*.%* P%..*%
% %
N ..,.% @ +..,
N 1.+&?
PE )atio as $er Constant 5ivi"en" 7o"el N
Average $ayout ratio
Average retention ratio F Ex$ecte" Bro/t# )ate o( 5ivi"en"
N ..1-+
..,& F ..1+&
N ..1-+
..*.**
N %.%+?
:alue Anc#or N Ex$ecte" EPS @ PE )atio
N 1*&.-1@ %.&+
N '%.'& mar3et $rice
Consoli"ate" )atios o( )anbaxy
Iear
)atios .. ..% ..& ..' ..*
Current )atios
%.*.? &.1*? .++? %.11? %.&*?
1.*&? ..--? ..-,? 1.*? 1.&-?
Ouic3 )atios
!nventory T.O
)atios
&..%? %.,&? %.*+? %.*.? %.+%?
Bross $ro(it
margin
'.,? ,.&1? 1-.-'? ,.--? 1&.-,?
Net $ro(it
margin
11.%. .&- 1&.* *.% -.%+
O$erating $ro(it
margin &.*,? +.**? 1+.%,? '.*-? 1..-1?
Cost o( goo"s
sol" ratio
+-.--? +&.&%? ,.+1? -.? ,1.,%?
)eturn on Assets +.*&? -*..,? *,.1.? &..+? %%.%%?
)eturn on
ca$ital em$loye"
%&.',? %+.''? 1.1'? +.%-? ,.'1?
EPS %.&%? ..'&? &.++? 1.1,? 1.1?
5HE )atio &%.%%? &,.-+? '-.+%? -1.%+? 1,,.%'?
!nterest coverage
)atio
%'.1%? &.'? *'.*+? 1..%? 1..&.?
5ivi"en"
coverage )atio
%.',? .,'? 1.*+? ..+.? 1..?
5ivi"en" $ayout
)atio
'..*? '.1'? *.*? .*,? .*1?
Total assets
turnover )atio
.1,? .*? .-*? .,*? .+%?
Fixe" assets
turnover )atio
.1&? %.'? .'? ..1? 1.+'?
Current assets
turnover )atio
1.'-? .%,? 1.++? 1.+? 1.+.?
Ca$ital
turnover)atio
..+-? 1.,.? 1.'? 1.1*? ..-?
5ebtors
turnover )atio %.,%? +..%? &.&'? &.? %.-1?
)etention )atio
+.1? *&.--? &..&? &1.&'? 1*.+*?
)eturn on
E>uity
%*.-,? %&.*? 1..,? -.&1? 1*.1-?
Boo3 :alue 1... 1.' 1.%& ..*% ..*%
PHE )atio
;$ros$ective< '.'*? 11'.&,? 1-.+.? ,'.&-? %'.+%?
Consoli"ate" )atios o( Ci$la
Iear
)atios .. ..% ..& ..' ..*
Current )atios
1.*.? 1.&-? .,+? .+'? .-+?
Ouic3 )atios
..*1? ..*.? 1.%&? 1.1? 1.&&?
!nventory T.O
)atios
..%.? ..1? ..? ..1? ...?
Bross $ro(it
margin
-.&%? %&.1%? %,..-? &&...? &&.-?
Net $ro(it
margin
1*.&'? 1'.&-? 1&.**? 1*.&-? 1,.++?
O$erating $ro(it
margin 1.*'? 1-.'&? 1-.%? ..+? 1.-%?
Cost o( goo"s
sol" ratio
+.-? +.%? +..? *.%? *.1?
)eturn on
Assets
1.*? ,,.? *-...? *&.,*? *,.-'?
)eturn on
ca$ital
em$loye"
'.&&? %.+? %.%? '.&1? ,.-?
EPS %.- &.1 '..- 1%.* ..1-
5HE )atio '&.1.? *&.*.? +..&? *.**? +..%&?
!nterest
coverage )atio
1&.+%? 1,..? %,.,+? *+.&1? *.1'?
5ivi"en"
coverage )atio
11.&*? +.&&? *.+%? '.+? *.+*?
5ivi"en" $ayout
)atio
*.-? 1..1-? 11.+*? **..+? '1.-*?
Total assets
turnover )atio
1.1+? ..-*? ..-%? ..,? ..,1?
Fixe" assets
turnover )atio
..&1? ..%1? ..,? ..1? ..1-?
Current assets
turnover )atio
..1? ..1-? ..1? ..11? ..11?
Ca$ital
turnover)atio
1...,? -.,.? ,.*? ,.&,? 1%.%*?
5ebtors
turnover )atio '.*.? &.&-? &.1-? &.? %.*-?
)etention )atio
..,,? ..,%? ..,1? ..+,? ..,?
)eturn on
E>uity
1.-+? +.,%? &.*? *.%*? %..*%?
Boo3 :alue 1&.+- 1+.,& 1..+ '.1* *.'
PHE )atio
;$ros$ective< .*.? 1.+%? .%,? 1.'? .%*?
Fin"ings64
? current ratio is increasing in (irst t/o years an" #as "ecrease" in t#ir" year an" again
increase in t#e subse>uent years . T#is s#o/s t#at t#e (irm #as t#e ability to meet its
current obligations.
? t#e (irm #as #ig# liability servicing ca$acity as it #as t#e ability to meet its
liabilities
? As t#ere /as increase in t#e gross $ro(its (rom .. to ..% it /as a goo" sign to
t#e com$any
? 5ecrease in t#e net $ro(it margin is a goo" sign to t#e com$any as it can earn more
return on investments i( it #as #ig# rate inventory turn over.
? T#e cost o( goo"s sol" ratio is continuously increasing in case o( )anbaxy.
PHE )atio
;retros$ective< *,.+,? &...1? ''.+1? &-.'+? 1...&-?
? Percentage o( return on assets is gra"ually "ecreasing year a(ter year.
? t#e )OCE ratio is gra"ually "ecreasing 0t#is means t#at t#e (irm is not utili1ing t#e
ca$ital e((iciently
? T#ere /as a "rastic rise in t#e EPS in ..&0 an" again t#ere /as "ecrease in t#e
subse>uent years.
? T#e "ebt e>uity ratio is increasing .it means t#at t#e cre"itors are $utting less money
o( t#eir o/n an" #ence it is a "anger sign to t#e com$any.
? T#e interest coverage ratio in more in t#e year .. but since t#en it /ent on
gra"ually "ecreasing. T#is coul" be a "anger sign (or t#e (irm t#at it is using
excessive "ebt an" "oes not #ave t#e ca$acity to assure $ayment o( t#e interest to t#e
cre"itors .
? T#e "ivi"en" $ayment ability is "ecreasing gra"ually year a(ter year.
? T#e (irm #ere.is not able to $ay t#e "ivi"en"s .t#e $ayout ratio is "ecreasing
gra"ually every year
? more e((icient in managing its assets as t#e ratio is increasing every year.
? t#ere is "ecrease in t#e ratio o( assets turn over .Aence t#e (irm is not e((icient in
managing an" utili1ing t#e (ixe" assets.
? increase in t#e current assets turnover ratio /#ere t#e (irm can meet its current
obligations.
? "ecrease in t#e ca$ital turnover ratios 0so it is not a goo" sign to t#e com$any.
? "ecrease" in "ebtors turnover ratios t#e subse>uent years is not goo" on t#e $art o(
t#e com$any.
? com$any is sai" to be "istributing t#e "ivi"en"s /it#out retaining any reserves. !t is
a"vantageous (rom t#e $oint o( vie/ o( s#are#ol"ers.
? T#e PHE )atio ;Pros$ective< /as #ig# in t#e year ..% . an" in t#e year ..& t#ere
/as a "rastic c#ange to 1-.+.?
? T#e PHE )atio ;retros$ective< is very #ig# in t#e year ..'.
Fin"ings;Ci$la<64
? T#e (irm9s current is increasing in (irst year an" #as increase" in t#ir" year an" again
increase in t#e subse>uent years
? T#e (irm #as lo/ liability servicing ca$acity in t#e (irst year 0.but it #as increase" in
next t/o years. An" t#ereby increase" in t#e subse>uent years. T#is s#o/s t#at t#e
com$any #as t#e ability to meet its liabilities.
? t#ere is a "ecrease in t#e movement o( t#e inventories. T#is may be a ba" sign to t#e
com$any inventory movement in t#e next subse>uent years is very lo/.
? increase in t#e gross $ro(its (rom .. to ..* is /as a goo" sign to t#e com$any
? t#e net $ro(it increase" (rom .. to ..* .it /as normal in ..&.But at t#e
subse>uent years t#e net $ro(it increase" . T#is is a goo" sign to t#e com$any as it can
earn more return on investments as it #as #ig# rate inventory turn over
? t#e o$erating ratio is increase" (rom .. to ..* subse>uently.t#is is a goo" sign to
t#e com$any as it #as increase its o$erating $ro(it ratio /#ic# is be(ore tax.
? t#e cost o( goo"s sol" ratio is continuously "ecreasing
? $ercentage o( return on assets is gra"ually "ecreasing year a(ter year.
? T#e )OCE ratio is gra"ually increasing 0t#is means t#at t#e (irm utili1ing t#e ca$ital
e((iciently
? EPS is Totally increase" (rom .. to ..* .But t#ere /as a "rastic rise in t#e EPS in
..* an" . t#is s#o/s t#at t#e s#are#ol"ers earn better "ivi"en"s
? t#e "ebt e>uity ratio is increasing .it means t#at t#e cre"itors are $utting less money
o( t#eir o/n an" #ence it is a "anger sign to t#e com$any.
? t#e interest coverage ratio in more in t#e year .. but since t#en it /ent on gra"ually
increasing. T#is coul" be a goo" sign (or t#e (irm t#at it is not using excessive "ebt
an" #ave t#e ca$acity to assure $ayment o( t#e interest to t#e cre"itors .
? T#e "ivi"en" $ayment ability is "ecreasing gra"ually year a(ter year.
? T#e (irm is able to $ay t#e "ivi"en"s .T#e $ayout ratio is increasing gra"ually every
year.
? t#e (irm is not e((icient in managing its assets as t#e ratio is "ecreasing every year.it is
not a goo" sign to t#e com$any.
? t#ere is "ecrease in t#e current assets turnover ratio. !n t#e year .. to ..% t#ere
increase in t#e ratios 0but t#ere is a "ecrease in t#e ratios (rom ..& on/ar"s.
? t#ere is increase in t#e ca$ital turnover ratios (rom .. to ..* 0so it is a goo" sign
to t#e com$any. !t is $er(orming $er(orm better .
? t#e "ebtors turnover ratio is #ig# in .. an" gra"ually "ecrease" in t#e subse>uent
years . t#is is not goo" on t#e $art o( t#e com$any.
? T#e retention ratio is increase" (rom .. to ..& an" "ecrease" in t#e year ..' .but
t#ere /as again rise in t#e ratio in ..*
? But in t#e (ollo/ing gra$# t#ere /as increase in t#e return on e>uity ratio (rom ..
to ..* .
? t#e boo3 value o( t#e s#ares is "ecrease" (rom .. to ..' . an" t#ere /as a slig#t
rise in t#e boo3 value.it is because o( t#e increase in t#e number o( s#ares.(rom ..'
on/ar"s.
? T#e PHE )atio ;$ros$ective< "ecrease" (rom .. to ..% .!t increase" in ..& an"
again t#ere /as "ecrease in ..'
? T#e PHE )atio ;$ros$ective< "ecrease" (rom .. to ..& .An" again t#ere /as
"ecrease in ..' .!n ..* t#e ratio again increase".T#is is because o( t#e c#anges in
t#e mar3et $rices.
Bibliogra$#y64
nsein"ia.com
bsein"ia.com
)anbaxy.com
Ci$la.com
doc_692606494.doc
In the Top down approach, first of all the overall Economy is analyzed to judge the general direction, in which the economy is heading. The direction in which the economy is heading has a bearing on the performance of various industries
TABLE OF CONTENTS
SL.No
Particulars Page numbers
1. Executive Summary
. !ntro"uction to t#e To$ic
%. Economic analysis
&. !n"ustrial Analysis
'. Com$any analysis o( )anbaxy
*. Com$any Analysis o( Ci$la
+. Com$arative )atio Table o( )anbaxy
,. Com$arative )atio Table o( Ci$la
-. Fin"ings
1.. Annexures an" Bibliogra$#y
Executive Summary
!n t#e To$ "o/n a$$roac#0 (irst o( all t#e overall Economy is analy1e" to 2u"ge t#e general
"irection0 in /#ic# t#e economy is #ea"ing. T#e "irection in /#ic# t#e economy is #ea"ing
#as a bearing on t#e $er(ormance o( various in"ustries. T#ats /#y Economy analysis is
im$ortant. T#e out$ut o( t#e Economy analysis is a list o( in"ustries0 /#ic# s#oul" $er(orm
/ell0 given t#e general tren" o( t#e economy an" also an i"ea0 /#et#er to invest or not in t#e
given economic con"itions.
Fun"amental analysis is t#e analysis0 /#erein t#e investment "ecisions are ta3en on t#e basis
o( t#e (inancial strengt# o( t#e com$any. T#ere are t/o a$$roac#es to (un"amental analysis0
vi1.0 E4!4C analysis or t#e To$ 5o/n a$$roac# to Fun"amental analysis an" C4!4E analysis or
t#e Bottom u$ a$$roac#. !n t#e (ollo/ing section0 /e ex$lain bot# t#ese a$$roac#es.
T#e main ob2ective o( un"erta3ing t#e $ro2ect in E4!4C Analysis is 6
• 7easuring t#e $er(ormances o( t#e com$any by calculating relate" ratios.
Sub Ob2ectives 6
• Pre"icting t#e (uture Sales0 ex$ecte" EPS 0 etc o( t#e com$any.
• To measure t#e viability o( t#e t/o com$anies.
!ntro"uction to t#e Com$any64
.!L8FS investsmart is !n"ia9s largest Financial 7ulti$lex.!t /as A/ar"e" as at#e best
Financial A"visor in retail segment by CNBC T: in ..*.
!L8FS !nvestsmart Limite" ;!!L< is an initiative in t#e (iel" o( Financial Services starte" by
!n(rastructure Leasing 8 Financial Services ;!L8FS<0 an institution 3no/n (or its innovative
an" $ioneering initiatives in t#e areas o( !n(rastructure0 Cor$orate Finance an" !nvestment
Ban3ing. !!L /as set u$ in October 1--+ an" began its retail o$erations in Se$tember 1--,
!L8FS !nvestsmart Limite" ;!!L< /as set u$ /it# t#e ob2ective o( becoming one o( t#e
lea"ing (ull service bro3erage #ouses in t#e country /it# a strong ex$ertise in /eb4base"
tec#nology as /ell as strengt#s in $#ysical "istribution. To"ay /it# a $resence in more t#an
-. cities across !n"ia t#roug# more t#an .. outlets0 !!L #as become one o( t#e most
$rominent $layers in t#e Financial Services !n"ustry /it# service o((erings across "i((erent
categories
Promoters an" S#are#ol"ers o( !L8FS !nvestsmart Limite"
As mentione" earlier !!L /#ic# /as $romote" by !L8FS in 1--+0 #as come a long /ay since
its ince$tion. !t is a matter o( great $ri"e (or !!L t#at some o( t#e /orl"=s biggest
organisations are becoming e>uity o/ners o( t#e com$any
T#e stoc3#ol"ing $attern as o( to"ay involves !L8FS /#ic# #ol"s %..*&? e>uity sta3e0
/#ile So(tban3 Asia !n(rastructure Fun" L.P. ;SA!F< an" E@T)A5E F!NANC!AL0 t#roug#
its /#olly o/ne" subsi"iary
)etail business64
T#e )etail Business 5ivision at !!L is involve" in "ealing /it# a range o( (inancial $ro"ucts
o((ere" to customers across !n"ia t#roug# multi$le locations. T#e retail business is (urt#er
categorise" into various business "ivisions catering to varie" nee"s o( our customers. T#ese
inclu"e "ivisions catering to customers (or !nvestment o$tions suc# as E>uity Tra"ing0
5erivatives Tra"ing0 Commo"ity Tra"ing0 !PO !nvestments0 Fixe" !ncome $ro"ucts0 7utual
Fun" !nvestments as /ell as !nsurance 8 Aome Loans A"visory services. !n a""ition /e also
o((er allie" services to (acilitate t#e investment $rocess0 li3e custo"ial an" "e$ository
services0 /#ic# are o((ere" t#roug# t#e !L8FS 5e$ository Services. !!L=s ex$ertise across all
t#ese categories enable it to res$on" to t#e varying nee"s o( a "eman"ing clientele ensuring
t#at t#eir investment $lans are execute" as $er t#eir in"ivi"ual re>uirements
7erc#ant ban3ing "ivision
T#e 7erc#ant Ban3ing "ivision o((ers a com$lete range o( services /#ic# inclu"es
management o( !POs0 rig#ts issues0 buy bac3 o((ers0 o$en o((ers an" $rivate $lacements o(
e>uity. !ts extensive contact base an" strong relations#i$s "evelo$e" /it# :enture Ca$ital
Fun"s an" Private E>uity Fun"s (or e>uity $lacements0 contributes to an e((ective "elivery
$lat(orm (or its clients
!nstitutional E>uity Business 5ivision64
!nstitutional E>uity Business ;!EB< t#rives on strong relations#i$s it #as built among
"omestic mutual (un"s0 ban3s0 (inancial institutions0 insurance com$anies an" $rivate sector
(un"s over t#e $ast (e/ years. !EB also #as /ell4"evelo$e" relations#i$s among cor$orates0
leverage" (rom its institutional $e"igree. E((icient execution0 >uality researc# an" #ig#
"egree o( com$liance /it# stoc3 exc#ange regulations an" et#ical business stan"ar"s bac3
!EB9s services to institutional investors t#roug# !POs0 E>uities0 5erivatives an" 7utual
Fun"s. !EB is /ell $ositione" to o((er su$$ort to t#e com$lete range o( investment ban3ing
services to cor$orate
5ebt bro3ing "ivision64
T#e 5ebt "ivision #as an active $resence in t#e secon"ary an" $rimary "ebt $lacement
mar3ets. !t "eals in various $ro"ucts inclu"ing Bovernment Securities0 Treasury Bills0 Bon"s
an" 5ebentures0 State guarantee" $a$ers an" Commercial $a$ers. !t #as strong realtions#i$
/it# !nstitutional clients suc# as Ban3s0 Primary 5ealers0 7utual Fun"s0
Pro2ect Syn"ication "ivision64
T#e Pro2ect Syn"ication "ivision #as been in#erite" (rom !L8FS. T#e syn"ication "es3 #as
so (ar /or3e" on 5ebt Syn"ication o( various large !n(rastructure Pro2ects in t#e country. T#e
man"ate inclu"es 5ebt structuring o( #ig#ly com$lex an" "i((icult $ro2ects. Pro2ect
Syn"ication (ocuses on t#e role o( an Arranger o( Pro2ect an" Structure" loans. C#ile (un"
mobilisation services are $rovi"e" across various areas0 in(rastructure sectors remain 3ey
(ocus areas (or syn"ication activity. T#e services un"er Pro2ect Syn"ication inclu"e $ro2ect
loan syn"ication0 structure" "ebt syn"ication an" "ebt restructuring. T#e syn"ication business
t#rives on its extensive contact base an" strong relations#i$s "evelo$e" over t#e years /it#
Ban3s an" Financial !nstitutions
!ntro"uction o( to$ic.
To "etermine t#e intrinsic value o( an e>uity s#are t#e security analyst must (orecast
t#e earnings an" t#e "ivi"en"s ex$ecte" (rom t#e stoc3s an" c#oose a "iscount rate /#ic#
re(lects t#e ris3iness o( t#e stoc3. T#is is /#at involve" in t#e (un"amental analysis /#ic# is
t#e most $o$ular met#o" use" by t#e investments $ro(essionals.
T#e earnings $otential an" ris3iness o( t#e (irm are lin3e" to t#e $ros$ects o( t#e
in"ustry to /#ic# it belongs. So t#e $ros$ects o( t#e various in"ustries are largely in(luence"
by t#e "evelo$ments in t#e macro economy.
T#e researc#ers #ave (oun" t#at stoc3 $rice c#anges can be attribute" to t#e
(ollo/ing (actors6
? Economy /i"e (actors6 %.4%' $ercent.
? !n"ustry (actors6 1'4. $ercent.
? Com$any (actors 6 %.4%' $ercent
? Ot#er (actors6 1'4' $ercent
Base" on t#e above evi"ence0 a commonly a"vocate" $roce"ure o( t#e (un"amental analysis
involves a t#ree4 ste$ examination .T#ey are6
? Dn"erstan"ing o( t#e macro4economic environmental "evelo$ments.
? Analy1ing t#e $ros$ects o( t#e in"ustry to /#ic# t#e (irm belongs.
? Assessing t#e $ro2ecte" in(ormation o( t#e com$any an" t#e intrinsic value o( its s#ares.
T#e !n"ian P#armaceutical in"ustry is #ig#ly (ragmente" /it# about &0... $layers ;aroun"
%%. in t#e organise" sector<. T#e to$ ten com$anies ma3e u$ (or more t#an a t#ir" o( t#e
mar3et. T#e revenues generate" by t#e in"ustry are a$$roximately DSE + bn an" #ave gro/n
at an average rate o( 1.? over last (ive years. T#e !n"ian $#arma in"ustry accounts (or about
1? o( t#e /orl"=s $#arma in"ustry in value terms an" ,? in volume terms.
!n t#e recent $ast0 !n"ian com$anies #ave targete" international mar3ets an" #ave exten"e"
t#eir $resence t#ere. C#ile some com$anies are ex$orting bul3 "rugs0 ot#ers #ave move" u$
t#e value c#ain an" are ex$orting (ormulations an" generic $ro"ucts. !n"ia also o((ers
excellent ex$orts o$$ortunities (or clinical trials0 )850 custom synt#esis an" tec#nical
services li3e Bioin(ormatics.
T#e "rug $rice control or"er ;5PCO< continues to be a menace (or t#e in"ustry. T#ere are
t#ree tiers o( regulations F on bul3 "rugs0 on (ormulations an" on overall $ro(itability. T#is
#as ma"e t#e $ro(itability o( t#e sector susce$tible to t#e /#ims an" (ancies o( t#e $ricing
aut#ority. T#e ne/ P#armaceutical Policy ..*0 /#ic# $ro$oses to bring %'& essential "rugs
un"er $rice control #as not been o((icially $asse" as yet an" #as been sti((ly o$$ose" by t#e
$#armaceutical in"ustry.
C#ile t#e average )85 s$en"ing in !n"ia as a /#ole is a meager ? o( sales0 t#e s$en" o(
t#e to$ (ive com$anies is about '? to 1.?. 5es$ite gro/ing at a CAB) o( over '.? over
t#e last (our years0 t#e ratio is still /ay belo/ t#e global average o( 1'? to .? o( sales.
Ao/ever0 "es$ite t#e
relatively lo/ )85 s$en"ing0 !n"ian com$anies are ste$$ing u$ t#eir researc# activities to
ma3e t#emselves more sel( su((icient in terms o( $ro"uct "evelo$ment0 no/ t#at t#e $ro"uct
$atent regime #as come into (orce.
Su$$ly64 Aig#er (or tra"itional t#era$eutic segments0 /#ic# is ty$ical o( a "evelo$ing mar3et.
)elatively lo/er (or li(estyle segment.
5eman"64 :ery #ig# (or certain t#era$eutic segments. Cill c#ange as li(e ex$ectancy0 literacy
increases.
Barriers to entry64 Licensing0 "istribution net/or30 $atents0 $lant a$$roval by regulatory
aut#ority.
Bargaining $o/er o( su$$liers64 5istributors are increasingly $us#ing generic $ro"ucts in a
bi" to earn #ig#er margins.
Bargaining $o/er o( customers64 Aig#0 a (ragmente" in"ustry #as ensure" t#at t#ere is
/i"es$rea" com$etition in almost all $ro"uct segments. ;Currently also $rotecte" by t#e
5PCO<.
Com$etition64 Aig# (ragmente" in"ustry /it# t#e to %.. ;o( &...
7anu(acturing units<$layers accor"ing (or ,'? o( sales value.Consoli"ation is li3e to
intensi(y
!m$act o( BD5BET 4..,6
Bu"get ..,4.-6 P#armaceuticals
T#e $ast year #as been tumultuous (or t#e $#arma in"ustry0 /#ic# #as #a" to conten" /it# a
stee$ly rising ru$ee0 severe $rice erosion an" regulatory c#anges in t#e global generics
mar3ets an" rise in ra/ material costs. Aaving sai" t#at0 some $ositive "evelo$ments also
ensure" t#at t#e overall scenario /as not too ba". T#ese "evelo$ments inclu"e"
announcements by some ma2or "omestic $#arma ma2ors o( #iving o(( t#eir )85 units into
se$arate com$anies0 bagging out4licensing "eals /it# global innovators in return (or
milestone $ayments an" settling $atent la/suits /it# innovators to ensure a more stable an"
balance".
Bu"get 7easure
• !ncrease in allocation to t#e #ealt# sector by 1'? over ..+4.,.
• Allocation to t#e National )ural Aealt# 7ission ;N)A7< increase" to )s 10.'.
crore.
• Provision o( )s --% crore to t#e National Ai"s Control Programme an" allocation o(
)s 10.& crore (or t#e era"ication o( $olio /it# (ocus on #ig# ris3 "istricts in Dttar
Pra"es# an" Bi#ar.
• Customs "uty to be re"uce" (rom 1.? to '? on certain s$eci(ie" li(e saving "rugs
an" on bul3 "rugs use" (or t#eir manu(acture. T#ese "rugs are also exem$te" (rom
excise "uty or countervailing "uty.
• Excise "uty on all goo"s $ro"uce" in t#e $#armaceutical sector re"uce" (rom 1*? to
,?.
• Anti4A!5S "rug0 GAta1anavir90 as /ell as bul3 "rugs (or its manu(acture to be
exem$te" (rom excise "uty.
• !n or"er to $romote outsourcing o( researc#0 /eig#te" "e"uction o( 1'? on any
$ayment ma"e to com$anies engage" in )85.
BD5BET !7PACT
• !ncrease in allocation to t#e #ealt#care sector is a $ositive given t#e nee" to ram$ u$
t#e #ealt#care in(rastructure in t#e country an" im$rove t#e accessibility o( >uality
#ealt#care to a larger section o( t#e $o$ulation.
• )e"uction o( excise "uty (rom 1*? to ,? is a $ositive (or all $#arma com$anies
enabling t#em to boost $ro(itability going (or/ar" given t#at t#e excise "uty is being
$ai" on 7)P.
• !ncrease" allocation o( (un"s (or era"ication o( A!:HA!5S an" $olio an" re"uction in
customs "uty on certain li(e saving "rugs (rom 1.? to '? is a $ositive (or com$anies
#aving $ro"uct $i$eline catering to t#ese segments.
• Ceig#te" "e"uction o( 1'? on $ayments ma"e (or outsourcing researc# services is a
$ositive (or t#e sector as a /#ole given t#at t#e em$#asis on )85 #as increase".
CO7PANI !7PACT6
)e"uction o( excise "uty (rom 1*? to ,? is a $ositive (or all $#arma com$anies namely
"omestic com$anies suc# as Ci$la0 )anbaxy an" t#e li3es an" 7NC $#arma com$anies suc#
as BSJ P#arma0 P(i1er an" Aventis.
Em$#asis on allocating (un"s (or t#e era"ication o( A!:HA!5S an" $olio is a $ositive (or
Ci$la ;/#ic# #as a strong $resence in t#e manu(acture o( anti4A!5S "rugs< an" Panacea
Biotec ;/#ic# largely manu(actures oral $olio vaccines<.
Ceig#te" "e"uction o( 1'? on $ayments ma"e (or outsourcing researc# services is a
$ositive (or )85 (ocuse" com$anies suc# as )anbaxy an" Nic#olas Piramal.
!ntro"uction to )anbaxy6
)anbaxy Laboratories is >uite t#e rainma3er in !n"ia=s $#armaceutical business. T#e
com$any is !n"ia=s largest "rug "evelo$er an" manu(acturer0 /it# generics to$$ing its list o(
$ro"ucts. Anti4in(ectives CoAmoxyclav0 Amoxycillin0 Ce$#alexin0 Ci$ro(loxacin0 an"
Simvastatin are in )anbaxy=s to$ selling class o( me"icationsK all come in several
a"ministration (orms. Ot#er s$eci(ic "evelo$mental (ocuses inclu"e metabolic0 in(lammatory0
an" res$iratory illnesses. )anbaxy a""resses gastrointestinal0 car"iovascular0 an" central
nervous system "isor"ers0 as /ell as "iabetes0 $ain0 allergies0 an" A!:HA!5S. T#e com$any
also #as a groun"brea3ing anti4malarial can"i"ate in late4$#ase trials.
Aistory
)anbaxy Laboratories Lt". is t#e largest $#armaceutical com$any in !n"ia0 an" one o( t#e
/orl"=s to$ 1.. $#armaceutical com$anies. Long a s$ecialist in t#e $re$aration o( generic
"rugs0 )anbaxy is also one o( t#e /orl"=s to$ 1. in t#at $#armaceutical category as /ell. Iet0
/it# !n"ia=s agreement to a$$ly international $atent la/ at t#e beginning o( ..'0 )anbaxy
#as begun converting itsel( into a (ull4(le"ge" researc#4base" $#armaceutical com$any. A
ma2or $art o( t#is e((ort #as been t#e establis#ment o( t#e com$any=s o/n researc# an"
"evelo$ment center0 /#ic# #as enable" t#e com$any to begin to enter t#e ne/ c#emical
entities ;NCE< an" novel "rug "elivery systems ;N55S< mar3ets. !n t#e mi"4...s0 t#e
com$any #a" a number o( NCEs in $rogress0 an" #a" alrea"y launc#e" its (irst N55S
$ro"uct0 a single "aily "osage (ormulation o( ci$ro(loxacin. )anbaxy is a truly global
o$eration0 $ro"ucing its $#armaceutical $re$arations in manu(acturing (acilities in seven
countries0 su$$orte" by sales an" mar3eting subsi"iaries in && countries0 reac#ing more t#an
1.. countries t#roug#out t#e /orl". T#e Dnite" States0 /#ic# alone accounts (or nearly #al(
o( all $#armaceutical sales in t#e /orl"0 is t#e com$any=s largest international mar3et0
re$resenting more t#an &. $ercent o( grou$ sales. !n Euro$e0 t#e com$any=s $urc#ase o( )PB
;Aventis< S.A. ma3es it t#e largest generics $ro"ucer in t#at mar3et. T#e com$any is also a
lea"ing generics $ro"ucer in t#e Dnite" Jing"om an" Bermany an" else/#ere in Euro$e.
Euro$ean sales a""e" 1* $ercent to t#e com$any=s sales in ..&. )anbaxy=s ot#er ma2or
mar3ets inclu"e Bra1il0 )ussia0 an" C#ina0 as /ell as !n"ia0 /#ic# toget#er a""e" * $ercent
to t#e grou$=s sales. )anbaxy $oste" revenues o( E1.1, billion in ..&. T#e com$any0 /#ic#
remains controlle" an" le" by t#e (oun"ing Sing# (amily0 is liste" on t#e National Stoc3
Exc#ange o( !n"ia in 7umbai.
)anbaxy Laboratories #a" its origins in t#e early 1-*.s /#en )an2it Sing# an" Burbux
Sing#0 t/o em$loyees o( a La$anese $#armaceutical com$any o$erating in !n"ia0 (orme"
t#eir o/n $#armaceutical $re$arations com$any in Amritsar0 in Pun2ab state. T#e t/o merge"
t#eir names to (orm t#e name (or t#eir com$any0 )anbaxy.
T#roug# t#e 1-*.s0 !n"ia=s $#armaceutical mar3et remaine" "ominate" by (oreign "rug
ma3ers. T#e "omestic $#armaceutical manu(acturing in"ustry /as limite" in large $art to t#e
"osage $re$aration0 $ac3aging0 an" "istribution o( existing (ormulations. Li3e many !n"ian
"rug com$anies o( t#is $erio"0 )anbaxy lin3e" u$ /it# a Euro$ean $#armaceutical com$any0
an" began $ro"uction in 1-*.
)anbaxy=s o/ners soug#t a""itional (inancing an" turne" to a local moneylen"er0 B#ai
7o#an Sing#. By 1-**0 t#e $air #a" built u$ "ebts to Sing# o( more t#an t#e e>uivalent o(
E1..0.... C#en Sing#0 a native o( Pa3istan /#o #a" arrive" in !n"ia at t#e beginning o( t#at
"eca"e0 came to collect0 t#e )anbaxy $artners o((ere" to turn over t#eir com$any to #im
instea".
Sing# agree" to t#e "eal an" launc#e" t#e )anbaxy (amily on t#e $at# to/ar" buil"ing one o(
!n"ia=s largest business em$ires. Dn"er B#ai 7o#an Sing#0 )anbaxy initially maintaine" its
course o( $re$aring an" $ac3ing existing bran"e" $#armaceutical $ro"ucts (or t#e !n"ian
mar3et. T#e entry o( Sing#=s el"est son0 Parvin"er0 into t#e com$any in 1-*+0 #o/ever0 set
t#e com$any on a ne/ course to become a (ully in"e$en"ent $#armaceutical com$any.
Parvin"er Sing# #a" 2ust gra"uate" /it# a P#5 in c#emistry (rom t#e Dniversity o(
7ic#igan. T#e younger Sing#=s bac3groun" in c#emistry com$lemente" #is (at#er=s business
(lair. Iet Parvin"er Sing# #imsel( >uic3ly "is$laye" a talent (or business an" /as cre"ite"0 in
large $art0 /it# gui"ing t#e com$any into t#e ran3s o( t#e global $#armaceutical lea"ers.
)anbaxy=s goo" (ortune came in 1-+.0 /#en t#e !n"ian government $asse" legislation t#at
e((ectively en"e" $atent $rotection in t#e $#armaceutical in"ustry. !n"ian $#armaceutical
manu(acturers /ere no/ able to $ro"uce lo/4cost0 generic versions o( $o$ular0 yet ex$ensive
"rugs0 revolutioni1ing t#e "rug in"ustry in !n"ia an" in muc# o( t#e /orl". T#e Sing#s
>uic3ly too3 a"vantage o( !n"ia=s large0 #ig#ly traine"0 yet inex$ensive /or3(orce0 buil"ing
u$ a strong sta(( o( c#emists an" c#emical engineers.
T#e com$any struc3 $ay "irt early on0 /#en it launc#e" Calm$ose0 a generic (ormulation o(
t#e #ugely $o$ular )oc#e "iscovery0 :alium. )elease" in 1-*-0 Calm$ose imme"iately
$lace" )anbaxy on !n"ia=s $#armaceutical ma$. T#e com$any ex$an"e" >uic3ly0 an" by
1-+%0 )anbaxy o$ene" a ne/ (actory0 in 7o#ali0 (or t#e $ro"uction o( active $rinci$al
ingre"ients ;AP!s<. T#is (acility enable" t#e com$any to ex$an" its range o( generic
me"ications an" ingre"ients. To (inance its gro/t#0 t#e com$any liste" on t#e !n"ian Stoc3
Exc#ange t#at year.
)anbaxy=s ability to $ro"uce generic me"ications at (ar lo/er cost t#an its bran"e"
com$etitors $lace" t#e com$any in a strong $osition (or international ex$ansion0 es$ecially in
less "evelo$e" mar3ets. T#e com$any began its internationali1ation early on0 launc#ing a
2oint venture in Nigeria. T#at o$eration o$ene" a $ro"uction (acility in Lagos in 1-++.
)anbaxy ex$an"e" its $ro"uction at #ome as /ell0 o$ening a ne/ state4o(4t#e4art "osage
$lant in 5e/as in 1-,%. !n 1-,+0 t#e com$any became !n"ia=s lea"ing antibiotic an"
antibacterial $ro"ucer /#en it com$lete" a ne/ AP! $lant in Toansa0 in Pun2ab0 t#at year. T#e
Toansa (acility bac3e" u$ )anbaxy=s $lans to enter t#e D.S. mar3et0 an" in 1-,,0 t#e Toansa
$lant receive" Foo" an" 5rug A"ministration ;F5A< a$$roval.
)anbaxy (ormulate" a ne/ strategy0 t#at o( becoming a (ull4(le"ge" $#armaceutical
com$any. T#e "riving (orce be#in" t#e com$any=s ne/ "irection /as Parvin"er Sing#0 /#o
/as name" t#e com$any=s managing "irector in 1-,. Nonet#eless0 B#ai 7o#an Sing#
remaine" in control o( t#e com$any.
As $art o( its ne/ strategy0 )anbaxy launc#e" its o/n researc# an" "evelo$ment center in
1-,'. T#e com$any also ste$$e" u$ its mar3eting e((orts0 launc#ing a ne/ "e"icate"
mar3eting subsi"iary0 Stancare0 t#at year. By 1--.0 t#e com$any #a" a ne/ $ro"uct to sell0
/#en )anbaxy /as grante" a D.S. $atent (or its "oxycycline antibiotic $re$aration. T#e
(ollo/ing year0 t#e com$any /as grante" a D.S. $atent (or its ce$#alos$orin $re$arations0
an" t#e com$any built a ne/ state4o(4t#e4art (acility (or t#eir $ro"uction in 7o#ali.
A ma2or milestone (or t#e com$any came in 1--0 /#en it reac#e" a mar3eting agreement
/it# Eli Lilly 8 Co. T#e com$anies set u$ a 2oint venture in !n"ia to $ro"uce an" mar3et
Lilly=s bran"e" $#armaceuticals (or t#e "omestic mar3et. At t#e same time0 Lilly agree" to
begin mar3eting )anbaxy=s generic me"ications in t#e Dnite" States. !n t#is /ay0 )anbaxy
gaine" /i"escale access0 bac3e" by t#e #ig#ly res$ecte" Lilly0 into t#e /orl"=s single largest
"rugs mar3et.
Parvin"er Sing# too3 over as #ea" o( t#e com$any44ousting #is (at#er in /#at /as "escribe"
as a (amily (eu"44in 1--. By t#en0 )anbaxy #a" gro/n into one o( !n"ia=s largest
$#armaceutical com$anies on t#e basis o( its generics $ro"uction. Iet as $ressure gre/ on
!n"ia to begin en(orcing international "rug $atents0 t#e com$any itsel( a$$eare" to #ave
reac#e" a crossroa"s44/#et#er to remain (ocuse" on co$ying generic molecules0 or to begin
"evelo$ing ne/ "rugs in4#ouse. T#e com$any c#ose t#e latter0 an" in 1--% a"o$te" a ne/
cor$orate mission to announce its re(ormulate" ambitions6 MTo become a researc#4base"
international com$any.M
)anbaxy ma"e goo" on its mission44by t#e mi""le o( t#e next "eca"e0 nearly ,. $ercent o( its
sales came (rom outsi"e o( !n"ia. As a (irst ste$0 t#e com$any launc#e" a ne/ 2oint venture0
in C#ina0 bac3ing its entry into t#at mar3et /it# a $ro"uction (acility in Buang1#ou. T#e
(ollo/ing year0 t#e com$any establis#e" subsi"iaries in Lon"on0 Englan"0 an" in )aleig#0
Nort# Carolina. !n 1--'0 t#e com$any ste$$e" u$ its D.S. $resence /it# t#e $urc#ase o( O#m
Laboratories !nc.0 /#ic# gave t#e com$any its (irst manu(acturing $lant in t#at mar3et.
)anbaxy t#en launc#e" construction o( a ne/ an" state4o(4t#e4art manu(acturing /ing0
/#ic#0 com$lete" t#at year0 gaine" F5A a$$roval.
T#is ne/ (acility enable" )anbaxy to ste$ u$ its $resence in t#e Dnite" States0 an" in 1--,
t#e com$any began mar3eting its generic $ro"ucts un"er its o/n bran" name. T#at year0 in
a""ition0 t#e com$any (ile" an a$$lication to begin P#ase ! clinical testing on its (irst in4
#ouse "evelo$e" NCE. T#e (ollo/ing year0 t#e com$any=s N55S e((orts $ai" o(( as /ell0
/#en Bayer ac>uire" t#e rig#ts to mar3et )anbaxy=s single "aily4"osage ci$ro(loxacin
(ormulation.
)anbaxy=s international ex$ansion continue" as /ell0 /it# t#e launc# o( mar3eting o$erations
in Bra1il. As t#e largest $#armaceuticals mar3et in Latin America0 t#at country /as t#e
cornerstone o( t#e com$any=s $lans to ex$an" t#roug#out t#e region. )anbaxy also ex$an"e"
in Euro$e0 /it# t#e agreement in ... to ac>uire Bayer=s Bermany4base" generics business0
Basics. T#e com$any also a""e" $ro"uction $lants in 7alaysia an" T#ailan".
Parvin"er Sing# "ie" in 1--- an" longtime rig#t#an" man 5.S. Brar too3 over as com$any
lea"er0 naming (amily outsi"er Brian Tem$est as com$any $resi"ent. T#e ne/ management
team continue" Sing#=s ex$ansion strategy0 o$ening a ne/ manu(acturing $lant in :ietnam in
..1.
)anbaxy also soug#t ne/ alliances0 an" in ..% t#e com$any reac#e" a global "rug
"iscovery an" "evelo$ment $artners#i$ /it# BlaxoSmit#Jline. T#at agreement calle" (or
Blaxo to #an"le t#e later4stage "evelo$ment $rocess (or )anbaxy create" molecules. T#e
com$any=s international ex$ansion also too3 a ma2or ste$ (or/ar" at t#e en" o( ..0 /#en it
agree" to ac>uire )PB ;Aventis< in France0 t#at country=s lea"ing generic "rugs $ro"ucer.
)anbaxy=s sales #a" by t#en to$$e" t#e E1 billion mar30 $lacing t#e com$any not only as t#e
lea"er in !n"ia=s $#armaceuticals in"ustry0 but also among t#e ran3s o( t#e /orl"=s to$ 1..
$#armaceuticals com$anies. )anbaxy also boaste" a $lace among t#e /orl"=s to$ ten generic
"rugs $ro"ucers. !n a""ition0 t#e com$any #a" a"vance" a gro/ing number o( its o/n NCE
an" N55S molecules into clinical testing. T#e com$any=s transition into researc#4base"
$ro"uct "evelo$ment /as seen as crucial as !n"ia announce" its intention to en(orce
international "rug $atents at t#e beginning o( ..'.
)anbaxy a$$eare" $re$are" to meet t#is c#allenge0 #o/ever0 an" con(i"ently set its sig#ts on
boosting its annual sales $ast E billion by ..+ an" to more t#an E' billion by t#e beginning
o( t#e next "eca"e. !nternational gro/t# remaine" an essential $art o( t#at strategy. T#e
com$any began negotiations (or a ma2or ac>uisition in Bermany at t#e en" o( ..&0 /#ic#
/as ex$ecte" to be com$lete" in ..'. T#e com$any also launc#e" construction o( a ne/
E1.. million $ro"uction (acility in Bra1il. 7ean/#ile0 )anbaxy continue" to increase its
researc# an" "evelo$ment bu"get0 /it# t#e goal o( generating as muc# as &. $ercent o( its
revenues (rom its in4#ouse innovations by t#e .1.s. )anbaxy ex$ecte" to remain !n"ia=s
"rug lea"er into t#e ne/ century.
Princi$al Subsi"iaries
Basics BmbA ;Bermany<K Bu(ic P#arma Lt". ;-,?<K O#m Laboratories !nc. ;Dnite" States<K
)anbaxy ;Aong Jong< Lt".K )anbaxy ;7alaysia< S"n. B#". ;'*.'?<K )anbaxy
;Net#erlan"s< B.:.K )anbaxy ;S.A.< Pro$rietary Lt".K )anbaxy ;DJ< Lt".K )anbaxy 5o Brasil
Lt"a.K )anbaxy 5rugs an" C#emicals Com$anyK )anbaxy 5rugs Lt".K )anbaxy Egy$t Lt".K
)anbaxy Euro$e Lt". ;Dnite" Jing"om<K )anbaxy Farmaceutica Lt"a. ;Bra1ilK +.?<K
)anbaxy Fine C#emicals Lt".K )anbaxy France SASK )anbaxy !relan" Lt".K )anbaxy Nigeria
Lt". ;,&.,-?<K )anbaxy Panama0 S.A.K )anbaxy P#armaceuticals !nc. ;Dnite" States<K
)anbaxy Polan" S$. 1.o.o.K )anbaxy P)P ;Peru< S.A.C.K )anbaxy Dnic#em Com$any Lt".
;T#ailan"K ,,.'*?<K )anbaxy DSA0 !nc.K )anbaxy :ietnam Com$any Lt".K )anbaxy
;Buang1#ou C#inaK ,%?<K )anbaxy0 !nc. ;Dnite" States<K )anc#em !nc. ;Dnite" States<K
)anlab !nc. ;Dnite" States<K )anP#arm !nc. ;Dnite" States<K )excel P#armaceuticals Lt".K
Solus P#armaceuticals Lt".K Dnic#em 5istributors ;T#ailan"K --.-*?<K :i"yut !nvestments
Lt".K :i"yut Travel Services Lt".
Princi$al Com$etitors
)PB Enter$risesK BlaxoSmit#Jline Consumer Aealt#care Lt".K East !n"ia P#armaceutical
Cor3s Lt".K 5r. )e""y=s Laboratories Lt".K Ci$la Lt".K Conce$t P#armaceuticals Lt".K
J#an"el/al Laboratories Lt".K 5abur !n"ia Lt".
1< Current )atios N Current assets
Current liabilities
Iear .. ..% ..& ..' ..*
)atios %.*.? &.1*? .++? %.11? %.&*?
!nter$retation64
T#e current ratio o( t#e
(irm measures t#e s#ort
term solvency 0t#at is its
ability to meet t#e s#ort
term obligations. !n t#e
(ollo/ing gra$# /e can
say t#at t#e (irm9s current ratio is increasing in (irst t/o years an" #as "ecrease" in t#ir" year
an" again increase in t#e subse>uent years . T#is s#o/s t#at t#e (irm #as t#e ability to meet
its current obligations.
T#is also means t#at t#e com$any is bloc3ing u$ t#e assets an" are not been utili1e" in t#e
ot#er investments.
< Ouic3 ratiosN Ouic3 assets
Current liabilities
Iear .. ..% ..& ..' ..*
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
Ratios
)atios 1.*& ..-- ..-, 1.* 10&-
!nter$retation64
Ouic3 ratios are use" to measure t#e (irm9s ability to service its s#ort term liabilities .(rom
t#e (ollo/ing gra$# /e can say t#at t#e (irm #as #ig# liability servicing ca$acity in t#e (irst
year 0.but it #as "ecrease" in next t/o years. An" t#ereby increase" in t#e subse>uent years.
T#is s#o/s t#at t#e com$any #as t#e ability to meet its liabilities.
%< !nventory turnover ratio N cost o( goo"s sol"
Average inventory
Iear .. ..% ..& ..' ..*
)atios &..% %.,& %.*+ %.*. %.+%
!nter$retation64
T#is means t#at t#e inventory in t#e (irst year is been sol" very (ast. An" t#ere is an "ecrease
in t#e movement o( t#e inventories but it slig#tly increase" in t#e last year. T#is may be a
goo" sign to t#e com$any t#at it may still increase t#e inventory movement in t#e next
subse>uent years.
&< Bross $ro(it 7argin N gross $ro(it
Sales
Iear .. ..% ..& ..' ..*
)atios '.,? ,.&1? 1-.-'? ,.--? 1&.-,?
!nter$retation64
T#e gross $ro(it measures t#e relation bet/een t#e sales an" $ro(its .As t#ere /as increase in
t#e gross $ro(its (rom .. to ..% it /as a goo" sign to t#e com$any 0but it "ecrease" in
t#e subse>uent years an" again increase" in t#e last year .it /as not muc# goo" as com$are"
to t#e $revious years.
'< Net $ro(it margin N $ro(it a(ter tax
Sales
Iear .. ..% ..& ..' ..*
)atios 11.%. .&- 1&.* *.% -.%+
!nter$retation64
T#e net $ro(it margin is t#e in"icative o( t#e managements ability to o$erate t#e business
/it# su((icient success. !n t#e (ollo/ing gra$# /e can see t#at t#e net $ro(it increase" (rom
.. to ..% .it /as normal in ..& .But at t#e subse>uent years t#e net $ro(it "ecrease" .
T#is is a goo" sign to t#e com$any as it can earn more return on investments i( it #as #ig#
rate inventory turn over.
*< O$erating $ro(it ratio N EB!T
Sales
Iear .. ..% ..& ..' ..*
)atios &.*,? +.**? 1+.%,? '.*-? 1..-1?
!nter$retation64
+< Cost o( goo"s sol" ratio N cost o( goo"s sol" @1..
Net sales
Iear .. ..% ..& ..' ..*
)atios
+-.--? +&.&%? ,.+1? -.? ,1.,%?
!nter$retation64
T#e cost o( goo"s sol" ratio s#o/s /#at $ercentage s#are o( sales is consume" by cost o(
goo"s sol" 0 an" /#at $ro$ortion is available (or meeting ex$enses .!n t#e (ollo/ing (igure
/e can se t#at t#e cost o( goo"s sol" ratio is continuously increasing .
,< )eturn on Assets N PATP !nterest @1..
Average (ixe" assets
Iear .. ..% ..& ..' ..*
)atios +.*&? -*..,? *,.1.? &..+? %%.%%?
!nter$retation64
T#e )OA measures t#e $ro(itability o( t#e total (un"s .#ere in t#e (ollo/ing (igure /e can
say t#at $ercentage o( return on assets is gra"ually "ecreasing year a(ter year.
-< )eturn on ca$ital em$loye" N Pro(it a(ter tax @1..
Average total ca$ital em$loye"
Iear .. ..% ..& ..' ..*
)atios %&.',? %+.''? 1.1'? +.%-? ,.'1?
!nter$retation64
T#e )OCE is similar to t#e )OA .Aere t#e $ro(its are relate" to t#e total ca$ital em$loye".
Aig#er t#e ratio0 more e((icient is t#e use o( ca$ital em$loye" .But in t#e (ollo/ing gra$#
/e can say t#at t#e ratio is gra"ually "ecreasing 0t#is means t#at t#e (irm is not utili1ing t#e
ca$ital e((iciently
1.< EPS N Net $ro(it available to t#e e>uity s#are#ol"ers @1..
Number o( or"inary s#ares outstan"ing
Iear .. ..% ..& ..' ..*
)atios %.&%? ..'&? &.++? 1.1,? 1.1?
!nter$retation64
T#e EPS in"icates t#e earnings o( a s#are .by t#e (ollo/ing gra$# it is clear t#at t#e EPS is
Totally "ecrease" (rom .. to ..% .But t#ere /as a "rastic rise in t#e EPS in ..& 0an"
again t#ere /as "ecrease in t#e subse>uent years.
11< 5HE )atio N Total "ebt
S#are#ol"ers e>uity
Iear .. ..% ..& ..' ..*
)atios &%.%%? &,.-+? '-.+%? -1.%+? 1,,.%'?
!nter$retation64
T#e "ebt e>uity ratio is t#e relations#i$ bet/een t#e borro/e" (un"s an" t#e o/ner9s
ca$ital. Aere in t#e (ollo/ing gra$# it is clear t#at t#e "ebt e>uity ratio is increasing .it means
t#at t#e cre"itors are $utting less money o( t#eir o/n an" #ence it is a "anger sign to t#e
com$any.
1< !nterest coverage N EB!T
!nterest
Iear .. ..% ..& ..' ..*
)atios %'.1%? &.'? *'.*+? 1..%? 1..&.?
!nter$retation64
T#is ratio measures t#e "ebt servicing ca$acity o( t#e (irm .(rom t#e (ollo/ing gra$# 0t#e
interest coverage ratio in more in t#e year .. but since t#en it /ent on gra"ually
"ecreasing. T#is coul" be a "anger sign (or t#e (irm t#at it is using excessive "ebt an" "oes
not #ave t#e ca$acity to assure $ayment o( t#e interest to t#e cre"itors .
1%< 5ivi"en" coverage N EAT
Pre(erence "ivi"en"
Iear .. ..% ..& ..' ..*
)atios %.',? .,'? 1.*+? ..+.? 1..?
!nter$retation64
T#is ratio measures t#e "ivi"en" $ayment ability o( t#e (irm /#ic# carry a state" rate o(
return to t#e s#are#ol"ers.Aig#er t#e ratio better /ill be to t#e s#are#ol"ers . but #ere t#e
"ivi"en" $ayment ability is "ecreasing gra"ually year a(ter year.
1&< 5ivi"en" $ayout ratio N 5ivi"en" $ai" @1..
EPS
Iear .. ..% ..& ..' ..*
)atios '..*? '.1'? *.*? .*,? .*1?
!nter$retation64
T#is states t#e (irms ability to $ay t#e "ivi"en"s to t#e s#are#ol"ers.Even #ere t#e $ayment
ratio is "ecreasing . T#e (irm #ere.is not able to $ay t#e "ivi"en"s .t#e $ayout ratio is
"ecreasing gra"ually every year.
1'< Total assets turnover ratio N cost o( goo"s sol" @1..
Average total assets
Iear .. ..% ..& ..' ..*
)atios .1,? .*? .-*? .,*? .+%?
!nter$retation64
T#e assets turnover ratio measures t#e e((iciency o( t#e (irm in in managing an" utili1ing
t#e assets. Aig#er t#e turnover more e((icient is t#e management. So (rom t#is gra$# /e can
say t#at t#e (irm is more e((icient in managing its assets as t#e ratio is increasing every year.
1*< Fixe" assets turnover ratio N cost o( goo"s sol" @1..
Average (ixe" assets
Iear .. ..% ..& ..' ..*
)atios .1&? %.'? .'? ..1? 1.+'?
!nter$retation64
As t#e (igure s#o/s0 t#ere is "ecrease in t#e ratio o( assets turn over .Aence t#e (irm is not
e((icient in managing an" utili1ing t#e (ixe" assets.
1+< Current assets turnover N cost o( goo"s sol" @1..
Average current assets
Iear .. ..% ..& ..' ..*
)atios 1.'-? .%,? 1.++? 1.+? 1.+.?
!nter$retation64
T#e current assets turnover ratio measures t#at #o/ >uic3ly t#e s#ort term obligations can be
met. Aig# t#e ratio 0more e((icient is t#e (irm9s ability to meet t#e s#ort term obligations. !n
t#e (ollo/ing gra$# it is s#o/n t#at t#ere is increase in t#e current assets turnover ratio.
1,< Ca$ital turnover ratio N cost o( goo"s sol"
Average ca$ital em$loye"
Iear .. ..% ..& ..' ..*
)atios ..+-? 1.,.? 1.'? 1.1*? ..-?
!nter$retation64
T#is ratio measures t#e relations#i$ bet/een cost o( goo"s sol" an" average ca$ital
em$loye". An" #o/ (ast is t#e utili1ation o( t#e ca$ital. t#is also measures /#at is t#e cost
o( goo"s sol"..From t#e gra$# /e can say t#at t#ere is "ecrease in t#e ratios 0so it is not a
goo" sign to t#e com$any. !t can still $er(orm better .
1-< 5ebtors turnover ratio N Total sales
5rs PBH)
Iear .. ..% ..& ..' ..*
)atios %.,%? +..%? &.&'? &.? %.-1?
!nter$retation64
T#e "ebtors turnover ratio measures t#e relation bet/een t#e total sales an" "ebtors.
!t means t#at t#e "ebtors are ex$ecte" to $ay /it#in t#e $rescribe" $erio" . #ig# t#e ratio
0more e((icient is t#e (irm in collecting t#e "ebt (rom t#e "ebtors. Aere in t#e (ollo/ing gra$#
/e can see t#at t#e ratio is #ig# in ..% an" gra"ually "ecrease" in t#e subse>uent years .
t#is is not goo" on t#e $art o( t#e com$any.
.< )etention ratio N )etaine" earnings
PAT
Iear .. ..% ..& ..' ..*
)atios +.1? *&.--? &..&? &1.&'? 1*.+*?
!nter$retation64
)etention ratio measures t#e $ercentage o( earnings retaine" by t#e com$any. Aig# t#e ratio0
more e((icient is t#e com$any is retaine" earnings. So (rom t#e (ollo/ing gra$# it is clear t#at
t#e retaine" earnings is "ecrease" (rom .. to ..* gra"ually . Aence t#e com$any is sai"
to be "istributing t#e "ivi"en"s /it#out retaining any reserves. !t is a"vantageous (rom t#e
$oint o( vie/ o( s#are#ol"ers.
1< )eturn on e>uity N PAT @1..
S#are#ol"ers (un"
Iear .. ..% ..& ..' ..*
)atios %*.-,? %&.*? 1..,? -.&1? 1*.1-?
!nter$retation 64
T#e )eturn on e>uity s#o/s #o/ muc# returns is being earne" .t#is is ma"e (rom t#e $oint
o( vie/ o( t#e s#are#ol"ers .i( t#e return on e>uity is more t#en it is sai" to be t#e most
"eman"e" s#ares in t#e mar3et.
But in t#e (ollo/ing gra$# t#ere /as "ecrease in t#e t#e ratio (rom .. to ..& . But t#ere
/as slig#t rise in t#e year ..*.
< Boo3 :alue N Net /ort#
No. o( s#ares oHs
Iear .. ..% ..& ..' ..*
)atios 1... 1.' 1.%& ..*% ..*%
!nter$retation64
T#e Boo3 value is too #ig# in t#e year ..&.!t #as increase" (rom .. to ..*.But t#ere
/as "ecrease in t#e year ..' an" ..*.Bot# t#e years #ave a constant ratio.
%< PE )atio; Pros$ective< N 7ar3et $rice
EPS
Iear .. ..% ..& ..' ..*
)atios '.'*? 11'.&,? 1-.+.? ,'.&-? %'.+%?
!nter$retation64
T#e PHE )atio ;Pros$ective< /as #ig# in t#e year ..% . an" in t#e year ..& t#ere /as a
"rastic c#ange to 1-.+.? . !t increase" in t#e ..' an" again "ecrease" in ..* .t#is is only
because o( t#e c#anges in t#e mar3et $rice every year.
&< PE )atio
etros$ective< N 7ar3et $riceBoo3 value
Iear .. ..% ..& ..' ..*
)atios ,*.-? &-.,,? +..1%? 1*.? *,.*?
!nter$retation64
T#e PHE )atio ;retros$ective< is very #ig# in t#e year ..'. !t "ecrease" (rom year .. to
..% an" again increase" (rom ..& to ..' an" it "ecrease" in ..*.
CAB) ;sales< N ; Sales in .. <Q1H& @1..
Sales in ..*
N ,-&.% Q..' @1..
&-',+.1
N 1.,& .r 1,&?
CAB) ;EPS< N ;EPS in ..< Q1H&@1..
EPS in ..*
N ;%.&1<Q..'@1..
1.&1
N ..-'* or -.'*?
latility o( )OE N )ange o( )OE over a $erio" ..' to .. Average o( )OE over a $erio"
N %*.-, F -.&1
%.',
N 1.1*
5ecom$ose )OE N PB!T @ SALES @ PBT @ PAT @ ASSETS
SALES ASSETS PB!T PBT NETCO)TA
N .1%.* @ %'%**.' @ .1%.* @ %+.. @ 11%..-*
%'%**.' 11%..-* .1%.* .1%.* %++..1-
N ...'*- @ %.1&% @ 1@ 1.11 @ ..&
N ...+%1 O) +.%1?
Average )etention ratio N )etention ratio in last % years
%
N ..&. P ..&1 P ..1*
%
N ..%%%
Average $ayout N 1 F ..%%%
N ..*+**
Ex$ecte" gro/t# rate o( 5ivi"en" N Average retention ratio @ Average return on e>uity
!n last % years in last % years
N ..&. P ..&1 P ..1* @ 1.., P-.&1 P 1*.1-
% %
N ..%%% @ 1'.'*
N '..%?
PE )atio as $er Constant 5ivi"en" 7o"el N
Average $ayout ratio
Average retention ratio F Ex$ecte" Bro/t# )ate o( 5ivi"en"
N ..*+**
..&** F ...'.%
N ..*+**
..&1'+
N 1.*
:alue Anc#or N Ex$ecte" EPS @ PE )atio
@ 1.*
!ntro"uction to Ci$la64
T#e com$any /as (oun"e" in 1-%' by J#/a2a Ab"ul Aamie"0 an" its c#airman to"ay is
Iusu( Aamie" ;b. 1-%*<0 t#e (oun"er=s el"est son. Ci$la0 originally (oun"e" as T#e C#emical0
!n"ustrial 8 P#armaceutical Laboratories is a $rominent !n"ian $#armaceutical com$any0
best43no/n outsi"e its #ome country (or $ro"ucing lo/4cost anti4A!5S "rugs (or A!:4
$ositive $atients in "evelo$ing countries. Ci$la ma3es "rugs to treat car"iovascular "isease0
art#ritis0 "iabetes0 /eig#t control0 "e$ression an" many ot#er #ealt# con"itions0 an" its
$ro"ucts are "istribute" in more t#an 1,. countries /orl"/i"e.
R1S
Among t#e #un"re"s o(
generic me"ications it $ro"uces (or international "istribution are atorvastatin0 amlo$i"ine0
(luoxetine0 venla(axine #y"roc#lori"e an" met(ormin.
To"ay ;..+<0 Ci$la is t#e /orl"=s largest manu(acturer o( antiretroviral "rugs ;A):s< to
(ig#t A!:HA!5S0 as measure" by units $ro"uce" an" "istribute" ;multinational bran"4name
"rugs are muc# more ex$ensive0 so in money terms Ci$la me"icines are $robably some/#ere
"o/n t#e list<. )oug#ly &.? o( A!:HA!5S $atients un"ergoing antiretroviral t#era$y
/orl"/i"e ta3e Ci$la "rugs. )an3e" t#ir" in Beneric mar3et s#are statistics in Sout# A(rican
Private Sector.
Because !n"ian la/ (rom 1-+ #as allo/e" no ;en"4$ro"uct< $atents on "rugs0 an" $rovi"e"
(or com$ulsory licensing0 Ci$la /as able to manu(acture me"icines /#ic# en2oy $atent
mono$oly in certain ot#er countries ;$articularly t#ose /#ere large0 multinational
$#armaceutical com$anies are base"<. By "oing so0 as /ell as by ma3ing
an executive "ecision not to ma3e $ro(its on A!5S me"ication0 Ci$la re"uce" t#e cost o(
$rovi"ing antiretrovirals to A!5S $atients (rom E10... an" beyon" ;mono$oly $rices
c#arge" by international $#arma conglomerates< "o/n to aroun" E%.. $er year. To"ay t#ey
are able to "o so (or un"er E1'. $er $atient $er year. C#ile t#is sum remains out o( reac# (or
many millions o( $eo$le in T#ir" Corl" countries0 government an" c#aritable sources o(ten
are in a $osition to ma3e u$ t#e "i((erence (or "estitute $atients.
T#e customary treatment o( A!5S consists o( a coc3tail o( t#ree "rugs. Ci$la $ro"uces an all4
in4one $ill calle" Triomune /#ic# contains all t#ree substances ;Lamivu"ine0 stavu"ine an"
Nevira$ine<0 somet#ing "i((icult else/#ere because t#e t#ree $atents are #el" by "i((erent
com$anies. One more $o$ular (ixe" "ose combination is t#ere0 /it# t#e name 5uovir4N. T#is
contains Lamivu"ine0 Ti"ovu"ine an" Nevira$ine
1< Current )atios N Current assets
Current liabilities
Iear .. ..% ..& ..' ..*
)atios 1.*.? 1.&-? .,+? .+'? .-+?
!nter$retation64
T#e current ratio o( t#e (irm measures t#e s#ort term solvency 0t#at is its ability to meet t#e
s#ort term obligations. !n t#e (ollo/ing gra$# /e can say t#at t#e (irm9s current is
increasing in (irst year an" #as increase" in t#ir" year an" again increase in t#e subse>uent
years . T#is s#o/s t#at t#e (irm #as t#e ability to meet its current obligations.
T#is s#o/s increase (rom ..& to ..* suse>uently.
T#is also means t#at t#e com$any is bloc3ing u$ t#e assets an" are not been utili1e" in t#e
ot#er investments.
< Ouic3 ratiosN Ouic3 assets
Current liabilities
Iear .. ..% ..& ..' ..*
)atios ..*1? ..*.? 1.%&? 1.1? 1.&&?
!nter$retation64
Ouic3 ratios are use" to measure t#e (irm9s ability to service its s#ort term liabilities .(rom
t#e (ollo/ing gra$# /e can say t#at t#e (irm #as lo/ liability servicing ca$acity in t#e (irst
year 0.but it #as increase" in next t/o years. An" t#ereby increase" in t#e subse>uent years.
T#is s#o/s t#at t#e com$any #as t#e ability to meet its liabilities.
%< !nventory turnover ratio N cost o( goo"s sol"
Average inventory
Iear .. ..% ..& ..' ..*
)atio ..%.? ..1? ..? ..1? ...?
!nter$retation64
T#is means t#at t#e inventory in t#e (irst year is been sol" very (ast. An" t#ere is an "ecrease
in t#e movement o( t#e inventories. T#is may be a ba" sign to t#e com$any inventory
movement in t#e next subse>uent years is very lo/.
&< Bross $ro(it 7argin N gross $ro(it
Sales
Iear .. ..% ..& ..' ..*
)atios -.&%? %&.1%? %,..-? &&...? &&.-?
!nter$retation64
T#e gross $ro(it measures t#e relation bet/een t#e sales an" $ro(its .As t#ere /as increase in
t#e gross $ro(its (rom .. to ..* it /as a goo" sign to t#e com$any because t#ere is
subse>uent increase in t#e gross $ro(it
7argin.
'< Net $ro(it margin N $ro(it a(ter sales
Sales
Iear .. ..% ..& ..' ..*
)atios 1*.&'? 1'.&-? 1&.**? 1*.&-? 1,.++?
!nte$retation64
T#e net $ro(it margin is t#e in"icative o( t#e managements ability to o$erate t#e business
/it# su((icient success. !n t#e (ollo/ing gra$# /e can see t#at t#e net $ro(it increase" (rom
.. to ..* .it /as normal in ..&.But at t#e subse>uent years t#e net $ro(it increase" .
T#is is a goo" sign to t#e com$any as it can earn more return on investments as it #as #ig#
rate inventory turn over.
*< O$erating $ro(it ratio N EB!T
Sales
Iear .. ..% ..& ..' ..*
)atios 1.*'? 1-.'&? 1-.%? ..+? 1.-%?
!nter$retation64
T#e o$erating $ro(it ratio s#o/s t#e relation bet/een EB!T an" Sales .Aere (rom t#e
(ollo/ing gra$# /e can say t#at t#e o$erating ratio is increase" (rom .. to ..*
subse>uently.t#is is a goo" sign to t#e com$any as it #as increase its o$erating $ro(it ratio
/#ic# is be(ore tax.
+< Cost o( goo"s sol" ratio N cost o( goo"s sol" @1..
Net sales
Iear .. ..% ..& ..' ..*
)atios +.-? +.%? +..? *.%? *.1?
!nter$retation64
T#e cost o( goo"s sol" ratio s#o/s /#at $ercentage s#are o( sales is consume" by cost o(
goo"s sol" 0 an" /#at $ro$ortion is available (or meeting ex$enses .!n t#e (ollo/ing (igure
/e can see t#at t#e cost o( goo"s sol" ratio is continuously "ecreasing . So t#is is a goo"
sign to t#e com$any as t#ere is lo/ cost incurre" (or sales.
,< )eturn on Assets N PATP !nterest @1..
Average (ixe" assets
Iear .. ..% ..& ..' ..*
)atios 1.*? ,,.? *-...? *&.,*? *,.-'?
!nter$retation64
T#e )OA measures t#e $ro(itability o( t#e total (un"s .#ere in t#e (ollo/ing (igure /e can
say t#at $ercentage o( return on assets is gra"ually "ecreasing year a(ter year.
-< )eturn on ca$ital em$loye" N Pro(it a(ter tax @1..
Average total ca$ital em$loye"
Iear .. ..% ..& ..' ..*
)atios '.&&? %.+? %.%? '.&1? ,.-?
!nter$retation64
T#e )OCE is similar to t#e )OA .Aere t#e $ro(its are relate" to t#e total ca$ital em$loye".
Aig#er t#e ratio0 more e((icient is t#e use o( ca$ital em$loye" .But in t#e (ollo/ing gra$#
/e can say t#at t#e ratio is gra"ually increasing 0t#is means t#at t#e (irm utili1ing t#e ca$ital
e((iciently
1.< EPS N Net $ro(it available to t#e e>uity s#are#ol"ers @1..
Number o( or"inary s#ares outstan"ing
Iear .. ..% ..& ..' ..*
)atios %.- &.1 '..- 1%.* ..1-
!nter$retation64
T#e EPS in"icates t#e earnings o( a s#are .by t#e (ollo/ing gra$# it is clear t#at t#e EPS is
Totally increase" (rom .. to ..* .But t#ere /as a "rastic rise in t#e EPS in ..* an" .
t#is s#o/s t#at t#e s#are#ol"ers earn better "ivi"en"s
11< 5HE )atio N Total "ebt
S#are#ol"ers e>uity
Iear .. ..% ..& ..' ..*
)atios '&.1.? *&.*.? +..&? *.**? +..%&?
!nter$retation64
T#e "ebt e>uity ratio is t#e relations#i$ bet/een t#e borro/e" (un"s an" t#e o/ner9s ca$ital.
Aere in t#e (ollo/ing gra$# it is clear t#at t#e "ebt e>uity ratio is increasing .it means t#at t#e
cre"itors are $utting less money o( t#eir o/n an" #ence it is a "anger sign to t#e com$any.
1< !nterest coverage N EB!T
!nterest
Iear .. ..% ..& ..' ..*
)atios 1&.+%? 1,..? %,.,+? *+.&1? *.1'?
!nter$retation64
T#is ratio measures t#e "ebt servicing ca$acity o( t#e (irm .(rom t#e (ollo/ing gra$# 0t#e
interest coverage ratio in more in t#e year .. but since t#en it /ent on gra"ually
increasing. T#is coul" be a goo" sign (or t#e (irm t#at it is not using excessive "ebt an" #ave
t#e ca$acity to assure $ayment o( t#e interest to t#e cre"itors .
1%< 5ivi"en" coverage N EAT
Pre(erence "ivi"en"
Iear .. ..% ..& ..' ..*
)atios 11.&*? +.&&? *.+%? '.+? *.+*?
!nter$retation64
T#is ratio measures t#e "ivi"en" $ayment ability o( t#e (irm /#ic# carry a state" rate o(
return to t#e s#are#ol"ers.Aig#er t#e ratio better /ill be to t#e s#are#ol"ers . but #ere t#e
"ivi"en" $ayment ability is "ecreasing gra"ually year a(ter year.
1&< 5ivi"en" $ayout ratio N 5ivi"en" $ai" @1..
EPS
Iear .. ..% ..& ..' ..*
)atios *.-? 1..1-? 11.+*? **..+? '1.-*?
!nter$retation64
T#is states t#e (irms ability to $ay t#e "ivi"en"s to t#e s#are#ol"ers.Aere t#e $ayment ratio is
increasing . T#e (irm #ere is able to $ay t#e "ivi"en"s .T#e $ayout ratio is increasing
gra"ually every year.
1'< Total assets turnover ratio N cost o( goo"s sol" @1..
Average total assets
Iear .. ..% ..& ..' ..*
)atios 1.1+? ..-*? ..-%? ..,? ..,1?
!nter$retation64
T#e assets turnover ratio measures t#e e((iciency o( t#e (irm in managing an" utili1ing t#e
assets. Aig#er t#e turnover more e((icient is t#e management. So (rom t#is gra$# /e can say
t#at t#e (irm is not e((icient in managing its assets as t#e ratio is "ecreasing every year.
1*< Fixe" assets turnover ratio N cost o( goo"s sol" @1..
Average (ixe" assets
Iear .. ..% ..& ..' ..*
)atios ..&1? ..%1? ..,? ..1? ..1-?
!nter$retation64
As t#e (igure s#o/s0 t#ere is "ecrease in t#e ratio o( assets turn over .Aence t#e (irm is not
e((icient in managing an" utili1ing t#e (ixe" assets.
!t is not a goo" sign to t#e com$any.
1+< Current assets turnover N cost o( goo"s sol" @1..
Average current assets
Iear .. ..% ..& ..' ..*
)atios ..1? ..1-? ..1? ..11? ..11?
!nter$retation64
T#e current assets turnover ratio measures t#at #o/ >uic3ly t#e s#ort term obligations can be
met. Aig# t#e ratio 0more e((icient is t#e (irm9s ability to meet t#e s#ort term obligations. !n
t#e (ollo/ing gra$# it is s#o/n t#at t#ere is "ecrease in t#e current assets turnover ratio. !n
t#e year .. to ..% t#ere increase in t#e ratios 0but t#ere is a "ecrease in t#e ratios (rom
..& on/ar"s.
1,< Ca$ital turnover ratio N cost o( goo"s sol"
Average ca$ital em$loye"
Iear .. ..% ..& ..' ..*
)atios 1...,? -.,.? ,.*? ,.&,? 1%.%*?
!nter$retation64
T#is ratio measures t#e relations#i$ bet/een cost o( goo"s sol" an" average ca$ital
em$loye". An" #o/ (ast is t#e utili1ation o( t#e ca$ital. t#is also measures /#at is t#e cost
o( goo"s sol"..From t#e gra$# /e can say t#at t#ere is increase in t#e ratios (rom .. to
..* 0so it is a goo" sign to t#e com$any. !t is $er(orming $er(orm better .
1-< 5ebtors turnover ratio N Total sales
5ebtors
Iear .. ..% ..& ..' ..*
)atios '.*.? &.&-? &.1-? &.? %.*-?
!nter$retation64
T#e "ebtors turnover ratio measures t#e relation bet/een t#e total sales an" "ebtors.
!t means t#at t#e "ebtors are ex$ecte" to $ay /it#in t#e $rescribe" $erio" . #ig# t#e ratio
0more e((icient is t#e (irm in collecting t#e "ebt (rom t#e "ebtors. Aere in t#e (ollo/ing gra$#
/e can see t#at t#e ratio is #ig# in .. an" gra"ually "ecrease" in t#e subse>uent years .
t#is is not goo" on t#e $art o( t#e com$any.
.< )etention ratio N )etaine" earnings
PAT
Iear .. ..% ..& ..' ..*
)atios ..,,? ..,%? ..,1? ..+,? ..,?
!nter$retation64
T#e retention ratio is increase" (rom .. to ..& an" "ecrease" in t#e year ..' .but t#ere
/as again rise in t#e ratio in ..* .t#is s#o/s t#at t#e com$any is stable in retaining t#e
earnings even a(ter $aying taxes.
1< )eturn on e>uity N PAT @1..
)etaine" earnings
Iear .. ..% ..& ..' ..*
)atios 1.-+? +.,%? &.*? *.%*? %..*%?
!nter$retation64
T#e )eturn on e>uity s#o/s #o/ muc# returns is being earne" .t#is is ma"e (rom t#e $oint
o( vie/ o( t#e s#are#ol"ers .i( t#e return on e>uity is more t#en it is sai" to be t#e most
"eman"e" s#ares in t#e mar3et.
But in t#e (ollo/ing gra$# t#ere /as increase in t#e ratio (rom .. to ..* .
< Boo3 :alue N Net /ort#
No. o( s#ares oHs
Iear .. ..% ..& ..' ..*
)atios 1&.+- 1+.,& 1..+ '.1* *.'
!nter$retation64
From t#e (ollo/ing gra$# it is clear t#at t#e boo3 value o( t#e s#ares is "ecrease" (rom ..
to ..' . an" t#ere /as a slig#t rise in t#e boo3 value.it is because o( t#e increase in t#e
number o( s#ares.(rom ..' on/ar"s.
%< PE )atio; Pros$ective< N 7ar3et $rice
EPS
Iear .. ..% ..& ..' ..*
)atios .*. 1.+% .%, 1.' .%*
!nter$retation64
T#e PHE )atio ;$ros$ective< "ecrease" (rom .. to ..% .!t increase" in ..& an" again
t#ere /as "ecrease in ..' .!n ..* t#e ratio again increase".T#is is because o( t#e c#anges
in t#e mar3et $rices.
&< PE )atio
etros$ective< N 7ar3et $riceBoo3 value
Iear .. ..% ..& ..' ..*
)atios *,.+, &...1 ''.+1 &-.'+ 1...&-
!nter$retation64
T#e PHE )atio ;$ros$ective< "ecrease" (rom .. to ..& .An" again t#ere /as "ecrease in
..' .!n ..* t#e ratio again increase".T#is is because o( t#e c#anges in t#e mar3et $rices.
CAB) ;sales< N ; Sales in ..+ <Q1H& 41 @1..
Sales in ..%<
N ;%+*%.+< Q..' 41@1..
1'--...
N %.,*?
CAB) ;EPS< N ;EPS in ..+< Q1H&41@1..
EPS in ..%<
N ;1.&-<Q..'41@1..
&.11
N %..%?
latility o( )OE N )ange o( )OE over a $erio" ..+to ..% Average o( )OE over a $erio"
N 1.-+ 4*.%*
*.
N 4..1*
5ecom$ose )OE N PB!T @ SALES @ PBT @ PAT @ ASSETS
SALES ASSETS PB!T PBT NETCO)TA
N '1&*.1& @ &,.,+ @ '1&*.1& @ &.-*.& @ 1,%%.++
&,.,+ 1,%%.++ '1&*.1& '1&*.1& 1''*.*%
N .. @ 1.%' @ 1@ ..+- @ 1.1+
N &.-'?
Average )etention ratio N )etention ratio in last % years
%
N ..,1 P..+, P ..,
%
N ..,.%
Average $ayout N 1 F ..,.%
N ..1-+
Ex$ecte" gro/t# rate o( 5ivi"en"N Avg reten ratio @ Avg return on e>
!n last % years in last % years
N ..,1 P..+, P.., @ &.* P*.%* P%..*%
% %
N ..,.% @ +..,
N 1.+&?
PE )atio as $er Constant 5ivi"en" 7o"el N
Average $ayout ratio
Average retention ratio F Ex$ecte" Bro/t# )ate o( 5ivi"en"
N ..1-+
..,& F ..1+&
N ..1-+
..*.**
N %.%+?
:alue Anc#or N Ex$ecte" EPS @ PE )atio
N 1*&.-1@ %.&+
N '%.'& mar3et $rice
Consoli"ate" )atios o( )anbaxy
Iear
)atios .. ..% ..& ..' ..*
Current )atios
%.*.? &.1*? .++? %.11? %.&*?
1.*&? ..--? ..-,? 1.*? 1.&-?
Ouic3 )atios
!nventory T.O
)atios
&..%? %.,&? %.*+? %.*.? %.+%?
Bross $ro(it
margin
'.,? ,.&1? 1-.-'? ,.--? 1&.-,?
Net $ro(it
margin
11.%. .&- 1&.* *.% -.%+
O$erating $ro(it
margin &.*,? +.**? 1+.%,? '.*-? 1..-1?
Cost o( goo"s
sol" ratio
+-.--? +&.&%? ,.+1? -.? ,1.,%?
)eturn on Assets +.*&? -*..,? *,.1.? &..+? %%.%%?
)eturn on
ca$ital em$loye"
%&.',? %+.''? 1.1'? +.%-? ,.'1?
EPS %.&%? ..'&? &.++? 1.1,? 1.1?
5HE )atio &%.%%? &,.-+? '-.+%? -1.%+? 1,,.%'?
!nterest coverage
)atio
%'.1%? &.'? *'.*+? 1..%? 1..&.?
5ivi"en"
coverage )atio
%.',? .,'? 1.*+? ..+.? 1..?
5ivi"en" $ayout
)atio
'..*? '.1'? *.*? .*,? .*1?
Total assets
turnover )atio
.1,? .*? .-*? .,*? .+%?
Fixe" assets
turnover )atio
.1&? %.'? .'? ..1? 1.+'?
Current assets
turnover )atio
1.'-? .%,? 1.++? 1.+? 1.+.?
Ca$ital
turnover)atio
..+-? 1.,.? 1.'? 1.1*? ..-?
5ebtors
turnover )atio %.,%? +..%? &.&'? &.? %.-1?
)etention )atio
+.1? *&.--? &..&? &1.&'? 1*.+*?
)eturn on
E>uity
%*.-,? %&.*? 1..,? -.&1? 1*.1-?
Boo3 :alue 1... 1.' 1.%& ..*% ..*%
PHE )atio
;$ros$ective< '.'*? 11'.&,? 1-.+.? ,'.&-? %'.+%?
Consoli"ate" )atios o( Ci$la
Iear
)atios .. ..% ..& ..' ..*
Current )atios
1.*.? 1.&-? .,+? .+'? .-+?
Ouic3 )atios
..*1? ..*.? 1.%&? 1.1? 1.&&?
!nventory T.O
)atios
..%.? ..1? ..? ..1? ...?
Bross $ro(it
margin
-.&%? %&.1%? %,..-? &&...? &&.-?
Net $ro(it
margin
1*.&'? 1'.&-? 1&.**? 1*.&-? 1,.++?
O$erating $ro(it
margin 1.*'? 1-.'&? 1-.%? ..+? 1.-%?
Cost o( goo"s
sol" ratio
+.-? +.%? +..? *.%? *.1?
)eturn on
Assets
1.*? ,,.? *-...? *&.,*? *,.-'?
)eturn on
ca$ital
em$loye"
'.&&? %.+? %.%? '.&1? ,.-?
EPS %.- &.1 '..- 1%.* ..1-
5HE )atio '&.1.? *&.*.? +..&? *.**? +..%&?
!nterest
coverage )atio
1&.+%? 1,..? %,.,+? *+.&1? *.1'?
5ivi"en"
coverage )atio
11.&*? +.&&? *.+%? '.+? *.+*?
5ivi"en" $ayout
)atio
*.-? 1..1-? 11.+*? **..+? '1.-*?
Total assets
turnover )atio
1.1+? ..-*? ..-%? ..,? ..,1?
Fixe" assets
turnover )atio
..&1? ..%1? ..,? ..1? ..1-?
Current assets
turnover )atio
..1? ..1-? ..1? ..11? ..11?
Ca$ital
turnover)atio
1...,? -.,.? ,.*? ,.&,? 1%.%*?
5ebtors
turnover )atio '.*.? &.&-? &.1-? &.? %.*-?
)etention )atio
..,,? ..,%? ..,1? ..+,? ..,?
)eturn on
E>uity
1.-+? +.,%? &.*? *.%*? %..*%?
Boo3 :alue 1&.+- 1+.,& 1..+ '.1* *.'
PHE )atio
;$ros$ective< .*.? 1.+%? .%,? 1.'? .%*?
Fin"ings64
? current ratio is increasing in (irst t/o years an" #as "ecrease" in t#ir" year an" again
increase in t#e subse>uent years . T#is s#o/s t#at t#e (irm #as t#e ability to meet its
current obligations.
? t#e (irm #as #ig# liability servicing ca$acity as it #as t#e ability to meet its
liabilities
? As t#ere /as increase in t#e gross $ro(its (rom .. to ..% it /as a goo" sign to
t#e com$any
? 5ecrease in t#e net $ro(it margin is a goo" sign to t#e com$any as it can earn more
return on investments i( it #as #ig# rate inventory turn over.
? T#e cost o( goo"s sol" ratio is continuously increasing in case o( )anbaxy.
PHE )atio
;retros$ective< *,.+,? &...1? ''.+1? &-.'+? 1...&-?
? Percentage o( return on assets is gra"ually "ecreasing year a(ter year.
? t#e )OCE ratio is gra"ually "ecreasing 0t#is means t#at t#e (irm is not utili1ing t#e
ca$ital e((iciently
? T#ere /as a "rastic rise in t#e EPS in ..&0 an" again t#ere /as "ecrease in t#e
subse>uent years.
? T#e "ebt e>uity ratio is increasing .it means t#at t#e cre"itors are $utting less money
o( t#eir o/n an" #ence it is a "anger sign to t#e com$any.
? T#e interest coverage ratio in more in t#e year .. but since t#en it /ent on
gra"ually "ecreasing. T#is coul" be a "anger sign (or t#e (irm t#at it is using
excessive "ebt an" "oes not #ave t#e ca$acity to assure $ayment o( t#e interest to t#e
cre"itors .
? T#e "ivi"en" $ayment ability is "ecreasing gra"ually year a(ter year.
? T#e (irm #ere.is not able to $ay t#e "ivi"en"s .t#e $ayout ratio is "ecreasing
gra"ually every year
? more e((icient in managing its assets as t#e ratio is increasing every year.
? t#ere is "ecrease in t#e ratio o( assets turn over .Aence t#e (irm is not e((icient in
managing an" utili1ing t#e (ixe" assets.
? increase in t#e current assets turnover ratio /#ere t#e (irm can meet its current
obligations.
? "ecrease in t#e ca$ital turnover ratios 0so it is not a goo" sign to t#e com$any.
? "ecrease" in "ebtors turnover ratios t#e subse>uent years is not goo" on t#e $art o(
t#e com$any.
? com$any is sai" to be "istributing t#e "ivi"en"s /it#out retaining any reserves. !t is
a"vantageous (rom t#e $oint o( vie/ o( s#are#ol"ers.
? T#e PHE )atio ;Pros$ective< /as #ig# in t#e year ..% . an" in t#e year ..& t#ere
/as a "rastic c#ange to 1-.+.?
? T#e PHE )atio ;retros$ective< is very #ig# in t#e year ..'.
Fin"ings;Ci$la<64
? T#e (irm9s current is increasing in (irst year an" #as increase" in t#ir" year an" again
increase in t#e subse>uent years
? T#e (irm #as lo/ liability servicing ca$acity in t#e (irst year 0.but it #as increase" in
next t/o years. An" t#ereby increase" in t#e subse>uent years. T#is s#o/s t#at t#e
com$any #as t#e ability to meet its liabilities.
? t#ere is a "ecrease in t#e movement o( t#e inventories. T#is may be a ba" sign to t#e
com$any inventory movement in t#e next subse>uent years is very lo/.
? increase in t#e gross $ro(its (rom .. to ..* is /as a goo" sign to t#e com$any
? t#e net $ro(it increase" (rom .. to ..* .it /as normal in ..&.But at t#e
subse>uent years t#e net $ro(it increase" . T#is is a goo" sign to t#e com$any as it can
earn more return on investments as it #as #ig# rate inventory turn over
? t#e o$erating ratio is increase" (rom .. to ..* subse>uently.t#is is a goo" sign to
t#e com$any as it #as increase its o$erating $ro(it ratio /#ic# is be(ore tax.
? t#e cost o( goo"s sol" ratio is continuously "ecreasing
? $ercentage o( return on assets is gra"ually "ecreasing year a(ter year.
? T#e )OCE ratio is gra"ually increasing 0t#is means t#at t#e (irm utili1ing t#e ca$ital
e((iciently
? EPS is Totally increase" (rom .. to ..* .But t#ere /as a "rastic rise in t#e EPS in
..* an" . t#is s#o/s t#at t#e s#are#ol"ers earn better "ivi"en"s
? t#e "ebt e>uity ratio is increasing .it means t#at t#e cre"itors are $utting less money
o( t#eir o/n an" #ence it is a "anger sign to t#e com$any.
? t#e interest coverage ratio in more in t#e year .. but since t#en it /ent on gra"ually
increasing. T#is coul" be a goo" sign (or t#e (irm t#at it is not using excessive "ebt
an" #ave t#e ca$acity to assure $ayment o( t#e interest to t#e cre"itors .
? T#e "ivi"en" $ayment ability is "ecreasing gra"ually year a(ter year.
? T#e (irm is able to $ay t#e "ivi"en"s .T#e $ayout ratio is increasing gra"ually every
year.
? t#e (irm is not e((icient in managing its assets as t#e ratio is "ecreasing every year.it is
not a goo" sign to t#e com$any.
? t#ere is "ecrease in t#e current assets turnover ratio. !n t#e year .. to ..% t#ere
increase in t#e ratios 0but t#ere is a "ecrease in t#e ratios (rom ..& on/ar"s.
? t#ere is increase in t#e ca$ital turnover ratios (rom .. to ..* 0so it is a goo" sign
to t#e com$any. !t is $er(orming $er(orm better .
? t#e "ebtors turnover ratio is #ig# in .. an" gra"ually "ecrease" in t#e subse>uent
years . t#is is not goo" on t#e $art o( t#e com$any.
? T#e retention ratio is increase" (rom .. to ..& an" "ecrease" in t#e year ..' .but
t#ere /as again rise in t#e ratio in ..*
? But in t#e (ollo/ing gra$# t#ere /as increase in t#e return on e>uity ratio (rom ..
to ..* .
? t#e boo3 value o( t#e s#ares is "ecrease" (rom .. to ..' . an" t#ere /as a slig#t
rise in t#e boo3 value.it is because o( t#e increase in t#e number o( s#ares.(rom ..'
on/ar"s.
? T#e PHE )atio ;$ros$ective< "ecrease" (rom .. to ..% .!t increase" in ..& an"
again t#ere /as "ecrease in ..'
? T#e PHE )atio ;$ros$ective< "ecrease" (rom .. to ..& .An" again t#ere /as
"ecrease in ..' .!n ..* t#e ratio again increase".T#is is because o( t#e c#anges in
t#e mar3et $rices.
Bibliogra$#y64
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doc_692606494.doc