Novartis

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Financial Analysis of Novartis

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Novartis

  1. 1. FINANCIAL ANALYSIS OF <ul><li>PRESENTED BY: </li></ul><ul><li>NAMES ROLL.NOS </li></ul><ul><li>HARISH ANAND 93 </li></ul><ul><li>VINIT GOGARI </li></ul><ul><li>SUNIL GUPTA 57 </li></ul><ul><li>SULBHA SEHLAR 17 </li></ul><ul><li>SHYAM LAL </li></ul>
  2. 2. PHARMACEUTICAL INDUSTRY IN INDIA <ul><li>Size Of The Industry : US $5 bn </li></ul><ul><li>Ranked 4 th In Terms Of Volume & 13 th In Terms </li></ul><ul><li>of Value. </li></ul><ul><li>8% Of Global Market In Volume Terms & Over </li></ul><ul><li>1% In Value Terms. </li></ul><ul><li>Annual Growth Rate of 14.3% </li></ul><ul><li>Expected To Grow To U.S $25 bn By the Year </li></ul><ul><li>2010. </li></ul>
  3. 3. <ul><li>There Are Roughly 23000 Pharma Companies. </li></ul><ul><li>Only around 300 pharma companies are in </li></ul><ul><li>the organized sector. </li></ul>PHARMACEUTICAL INDUSTRY IN INDIA (contd.)
  4. 4. PHARMACEUTICAL INDUSTRY IN INDIA (Contd..) e.g. PARACETAMOL e.g. Vicks Syrup e.g. GLUCOSE (CROCIN) Paracetamol SALINE Dextromethorphan
  5. 5. SWOT ANALYSIS <ul><li>THREATS </li></ul><ul><li>Low cost countries like </li></ul><ul><li>China & Israel. </li></ul><ul><li>OPPORTUNITIES </li></ul><ul><li>Huge market for </li></ul><ul><li>Lifestyle drugs. </li></ul><ul><li>M igration into a </li></ul><ul><li>product patent based </li></ul><ul><li>regime . </li></ul><ul><li>Indian pharma market </li></ul><ul><li>is one of the least </li></ul><ul><li>penetrated. </li></ul><ul><li>WEAKNESSES </li></ul><ul><li>Lower profitability due </li></ul><ul><li>to price regulations. </li></ul><ul><li>Highly fragmented </li></ul><ul><li>market. </li></ul><ul><li>STRENGTHS </li></ul><ul><li>Low cost producer of </li></ul><ul><li>drugs. </li></ul><ul><li>Growth of middle class </li></ul><ul><li>in the country. </li></ul><ul><li>P opulation of over a </li></ul><ul><li>billion . </li></ul>
  6. 6. RESEARCH & DEVELOPMENT <ul><li>Focus of companies on R&D has increased with </li></ul><ul><li>the advent of product patents. </li></ul><ul><li>Increase in R&D spending from US $ 2.3 million </li></ul><ul><li>in 1977 to US $ 80 million in 2001. </li></ul><ul><li>Major domestic players in R&D activities are </li></ul><ul><li>Ranbaxy, DR.Reddy’s, Novartis, Cipla, Nicholas Piramal and Wockhardt. </li></ul>
  7. 7. NOVARTIS HISTORY <ul><li>1996 – The shareholders of Sandoz & Ciba-Geigy </li></ul><ul><li>approve merger. </li></ul><ul><li>1997 – Novartis announces to acquire crop </li></ul><ul><li>protection business of Merk & co. </li></ul><ul><li>2000 – Novartis seeds is merged with </li></ul><ul><li>Astrazeneca’s agribusiness operations to </li></ul><ul><li>form Syngenta. </li></ul><ul><li>2001 – FDA grants clearance for Glivec. </li></ul><ul><li>2003 – Novartis unites its generics business </li></ul><ul><li>under one single global brand- Sandoz. </li></ul>
  8. 8. COMPANY PROFILE – NOVARTIS INDIA <ul><li>Novartis India – 51% subsidiary of Swiss giant </li></ul><ul><li>Novartis. </li></ul><ul><li>Established in the year 1996 by merging Hindustan </li></ul><ul><li>Ciba- Geigy and Sandoz (India). </li></ul><ul><li>Business: Pharmaceuticals, OTC,Generics & </li></ul><ul><li>Animal Health. </li></ul><ul><li>Manufacturing accounts for only 5% of turnover. </li></ul><ul><li>Trading activity helps Novartis reduce its </li></ul><ul><li>overheads. </li></ul><ul><li>Therapeutic Segments- Gynaecology, CNS,Anti- </li></ul><ul><li>infectives,CVS,Anti-Diabetes and Pain & Inflammation. </li></ul>
  9. 9. NOVARTIS INDIA- EXECUTIVE COMMITTEE
  10. 10. SHAREHOLDING PATTERN OF NOVARTIS INDIA
  11. 11. MARKET SHARE OF MNC PHARMA COMPANIES IN INDIA 1.8% NOVARTIS 5 2.2% AVENTIS 4 2.2% ABBOTT 3 3.0% PFIZER 2 5.6% GLAXO 1 MARKET SHARE COMPANIES RANK
  12. 12. NOVARTIS – PHARMACEUTICALS BUSINESS <ul><li>Pharmaceuticals business at Novartis India contributes around 62% of Sales. </li></ul>
  13. 13. SALES OF NOVARTIS INDIA IN 2006-2007.
  14. 14. GROWTH COMPARISON FOR NOVARTIS (0.58%) 6.06% 3.71% Total Expenses 6.08% 3.29% 9.74% Total Income 19.06% 16.31% 40.45% Other Income 5.20% 2.28% 7.05% Sales 2004-2005 2005-2006 2006-2007
  15. 15. EXPENSES AS % OF SALES FOR NOVARTIS 0.70% 0.19% 0.18% Interest 1.86% 2.46% 2.61% Depreciation 4.68% 2.20% 5.65% Material Cost 45.23% 50.37% 46.20% Purchase of Traded Goods 2004-2005 2005-2006 2006-2007
  16. 16. GRAPH SHOWING PAT FOR 4 YEARS
  17. 17. WORKING CAPITAL RATIOS CURRENT RATIO v/s QUICK RATIO
  18. 18. TURNOVER RATIOS
  19. 19. TURNOVER RATIOS (contd…)
  20. 20. TURNOVER RATIOS (contd…)
  21. 21. GROSS PROFIT MARGIN
  22. 22. LEVERAGE RATIO OF NOVARTIS 6.86 32.1 112.6 143.5 INTEREST-COVERAGE RATIO 0.01 0.01 0.01 0.01 L.T. DEBT TO EQUITY 2003-2004 2004-2005 2005-2006 2006-2007 RATIO
  23. 23. GRAPH OF NET PROFIT MARGIN
  24. 24. GRAPH OF RETURN ON NET WORTH
  25. 25. GRAPH OF RETURN ON EQUITY
  26. 26. GRAPH OF P/E
  27. 27. GRAPH OF EPS
  28. 28. DIVIDEND PER SHARE @ F.V. of Rs. 5 300 200 100 Rs. % of FV
  29. 29. DIVIDEND PAYOUT RATIO
  30. 30. BETA FOR NOVARTIS Beta value for Novartis for the year 2006-2007 is
  31. 31. REFERENCES <ul><li>Annual Reports of Novartis India </li></ul><ul><li>www. novartis .com </li></ul><ul><li>www. moneycontrol .com </li></ul><ul><li>www.money. rediff .com </li></ul><ul><li>www. myiris .com </li></ul>
  32. 32. THANK YOU

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