Cipla

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Cipla

  1. 1. Financial Accounting CIPLA Caring for life Balance Sheet Analysis
  2. 2. AGENDAOverview – CIPLASignificant accounting policiesShare price analysisCash flow statement analysisDupont analysis and comparison- Aurobindo Laboratories Ltd- Dr. Reddy’s Laboratories LtdComparison with industry average- PE Ratio- EPSAnalysis- BOD’s report8/13/2012 PRAXIS BUSINESS SCHOOL 2
  3. 3. OVERVIEW - CIPLAFounded in 1935 – Dr K A Hamied sets up "The Chemical, Industrial and Pharmaceutical Laboratories Ltd.”8/13/2012 PRAXIS BUSINESS SCHOOL 3
  4. 4. SIGNIFICANT ACCOUNTING POLICIES• Basis of Accounting • Research and Development• Use of Estimates • Expenditure on Regulatory• Principles of Approvals Consolidation • Investments• Fixed Assets • Revenue Recognition• Borrowing Costs • Income Tax• Depreciation • Impairment of Assets• Inventories • Government Grants• Foreign Exchange • Provisions and Contingent Transactions Liabilities• Employee Benefits 8/13/2012 PRAXIS BUSINESS SCHOOL 4
  5. 5. SHARE PRICE ANALYSIS Cipla SensexRs. 330.00 19500.00 19000.00Rs. 320.00 18500.00Rs. 310.00 18000.00Rs. 300.00 17500.00 17000.00Rs. 290.00 Cipla 16500.00 SensexRs. 280.00 16000.00 15500.00Rs. 270.00 15000.00Rs. 260.00 14500.00Rs. 250.00 14000.00 1 4 7 1013161922252831343740434649525558 1 5 9 13 17 21 25 29 33 37 41 45 49 53 57 9.8% Decline CIPLA.XLSX8/13/2012 PRAXIS BUSINESS SCHOOL 5
  6. 6. SHARE PRICE ANALYSIS Ranbaxy Sensex600 19500.00 19000.00500 18500.00 18000.00400 17500.00 17000.00300 Ranbaxy 16500.00 Sensex 16000.00200 15500.00100 15000.00 14500.00 0 14000.00 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 1 5 9 13 17 21 25 29 33 37 41 45 49 53 57 7.7% Decline RANBAXY.XLSX 8/13/2012 PRAXIS BUSINESS SCHOOL 6
  7. 7. CASH FLOW ANALYSIS• In the current period the company’s Cash & Cash equivalents have increased almost 38.28% to 84.13 crorefrom 60.84 crore, this hints that the spending have decreased to that extent in the current year.• Since there was a reduction of 41.68% in the sale of other investments it shows that company is holding on to investments.• The statement shows that the company has purchased investments worth 5228.18 crorea decrease of 41.6% compared to last year.8/13/2012 PRAXIS BUSINESS SCHOOL 7
  8. 8. CASH FLOW ANALYSIS• The outflow for fixed asset investment has also increased by 29.93% as compared to last year. This gives an indication about more Investments in infrastructure by the company recently.• 4.06% decrease is seen in dividends received on Investments.• The company has sold major fixed assets (a 229.9% increase compared to last year) recently as is evident from sales proceeds from Fixed Assets.• Last year subsidiaries paid back 17.6 crorebut this year company has given 204.47 croreto subsidiaries.• 224.33 % increase in inventory from last year.8/13/2012 PRAXIS BUSINESS SCHOOL 8
  9. 9. DUPONT ANALYSIS CIPLA ROTA (PBIT/TA) 14.64% TURNOVER OPERATING PROFIT CA LEVERAGE(REVENUE/TA) 78.64% (PBIT/REVENUE) 18.6% (SALES/CA) 130.6%8/13/2012 PRAXIS BUSINESS SCHOOL 9
  10. 10. DUPONT ANALYSIS CIPLA AUROBINDO DR. REDDY’S ROTA 14.64% 15.59% 15.4% TURNOVER 78.64% 79.09% 77.24% OPERATING 18.6% 19.72% 20.02% PROFITCURRENT ASSET 130.6% 123.85% 115.72% LEVERAGE 8/13/2012 PRAXIS BUSINESS SCHOOL 10
  11. 11. EARNINGS PER SHARE PAT (in crore) EPS = No. Of Shares Glenmark Aurobindo Dr. Reddy’sPAT 2121.78 5938 8934No. of Shares 270272053 291121290 168845585EPS 78.51 203.97 529.12 INDUSTRY AVERAGE = 270.53 PAT No. of Shares EPS CIPLA 960.39 11.96 8029213578/13/2012 PRAXIS BUSINESS SCHOOL 11
  12. 12. P/E RATIO STOCK PRICE P/E = EPS Glenmark Aurobindo Dr. Reddy’sMkt. 283.6 195.9 1638.55Price/ShareEPS 78.51 203.97 529.12P/E Ratio 3.61 0.96 3.10 INDUSTRY AVERAGE = 2.56 Mkt. EPS P/E Ratio Price/Share CIPLA 321.05 11.96 26.848/13/2012 PRAXIS BUSINESS SCHOOL 12
  13. 13. ANALYSIS - BOD’s REPORT• Domestic turnover rose by 12 per cent while export income went up by 16 per cent. Profit after tax for the year was 960 crore compared to 1081 crore last year, excluding the one- time sale of the I-pill brand last year. Sales & Other Income 7000 crore• There was a dip in operating margins of about 3 per cent, as a percentage of total revenue. This was mainly due to lower technical fees (60 crore compared to 150 crore last year)• In April 2010, the Company commenced commercial production of pharmaceutical formulations at the Special Economic Zone (SEZ) project, at Indore, Madhya Pradesh. The total investment for this project is about 900 crore.• Cipla’s fixed asset grew to 4200 crore from 3600 crore.• Cipla’s share holder fund reduced from 6800 crore to 5900 crore.8/13/2012 PRAXIS BUSINESS SCHOOL 13
  14. 14. ANALYSIS - BOD’s REPORT• During the year under review, almost 55 per cent of the total income originated from international markets.• On the occasion of Cipla’s Platinum Jubilee, the Company announced setting up of the Cipla Foundation by contributing a sum of 5 crore.• The Directors recommend a final dividend of Rs. Per share on 80,29,21,357 equity shares of Rs.2 each for the year 2010-11 amounting to Rs. 160.58crore.• The total dividend payout for the year 2010-11 inclusive of dividend tax would aggregate to Rs.261.53 crore.• CIPLA contributed significant net foreign exchange earnings to the tune of USD 420 million.8/13/2012 PRAXIS BUSINESS SCHOOL 14

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