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FINANCIAL ANALYSIS OF NOVARTIS INDIA
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FINANCIAL ANALYSIS OF NOVARTIS INDIA

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  • Loans and advances increased, inter corporate deposits increases Current Asset (Cash in hand) is increasing Increase in sundry debtors
  • Cash and bank balance increased
  • Unsecured loans decreased, reserves and surplus was high than 2009. Interest gain due to intercorporate deposits were made in 2009 and 10 Received tax free dividends (other income) DER=Total debt/ Shareholder equity
  • R and S increases and loan are decreasing so ultimately share holder funds are increasing. FA cost is decreasing in yr 2010 as compared 2009. HSBC mutual fund sold (all)---- results into decrease in TA PR= Shareholder funds/total assets*100
  • GPM= gross profit/ net sales *100
  • EAT= net sales *100
  • Fringe benefit tax (employment benefit tax) was nil in 2010 ROC=EBIT/Avg total capital employed *100
  • EPS= NPAT-Preference divident/no of equity
  • TA= COGS/Avg TA Less investment in 2011--- results in 1.06
  • Definition of 'Dividend' 1. A distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders. The dividend is most often quoted in terms of the dollar amount each share receives (dividends per share). It can also be quoted in terms of a percent of the current market price, referred to as dividend yield. Also referred to as "Dividend Per Share (DPS)." 2. Mandatory distributions of income and realized capital gains made to mutual fund investors.  Investopedia explains 'Dividend' 1. Dividends may be in the form of cash, stock or property. Most secure and stable companies offer dividends to their stockholders. Their share prices might not move much, but the dividend attempts to make up for this. High-growth companies rarely offer dividends because all of their profits are reinvested to help sustain higher-than-average growth. 2. Mutual funds pay out interest and dividend income received from their portfolio holdings as dividends to fund shareholders. In addition, realized capital gains from the portfolio's trading activities are generally paid out (capital gains distribution) as a year-end dividend.
  • Transcript

    • 1. Financial Analysis of NovartisFinancial Analysis of Novartis Analysed by: Vipul Patil (20) Poonam Mahajan (13) Nilesh Visave (10) Jaimy Shah (07) Deepali Jukar (03)
    • 2. COMPANY PROFILECOMPANY PROFILE  Novartis has been in India since 1947.  Its operates in India through four entities namely Novartis India Limited, listed on the Mumbai Stock Exchange, Novartis Healthcare Private Limited, Sandoz Pvt. Ltd and Chiron-Behring Vaccine Pvt. Ltd .  Nearly 4500 people are working at Novartis.  In India Novartis has a presence in pharmaceuticals, generics, Vaccines, OTC, eye care and Animal Health.
    • 3. CURRENT RATIOCURRENT RATIO 3.5 4 4.5 5 2009 2010 2011 4.12 4.4 4.83 CR • The ratio shows satisfactory ability of the firm to meet its current liabilities. •A firm has liquidity and its current assets in form of cash and debtors is more than inventories. •Also Loans and advances given were eventually high in the year 2010 and 2011
    • 4. QUICK RATIOQUICK RATIO 3.62 4.09 4.25 3.2 3.4 3.6 3.8 4 4.2 4.4 2009 2010 2011 QR •Quick ratio seems satisfactory. •Significant increase in 2011 due to increase in cash and bank balance
    • 5. DEBT EQUITY RATIODEBT EQUITY RATIO •Dependence on outsiders funds has decreased in 2011 by unsecured loans. •Unsecured loans decreased, reserves and surplus was high than 2009-2010. •Interest gain due to inter-corporate deposits were made in 2009 and 2010. •Received tax free dividends •Thus the company has as lesser risk.
    • 6. PROPRIETARY RATIOPROPRIETARY RATIO •Share holders funds have been increasing showing a good hold on share holders. •In 2011, large % of total assets were financed by the share holders funds. •As company was growing Reserves & surplus were increased throughout. •HSBC mutual fund sold (all)---- results into decrease in TA in 2011
    • 7. GROSS PROFIT MARGINGROSS PROFIT MARGIN RR 18.28% 20.33% 20.66% 17.00% 18.00% 19.00% 20.00% 21.00% 2009 2010 2011 GROSS PROFIT Gross Profit Margin: •In 2010-2011, gross profit had increased due to increase in sales. •Serves for paying additional expenses and future savings.
    • 8. NET PROFITNET PROFIT •It show the profitability in the business. •Management working efficiently.
    • 9. RETURN ON CAPTIALRETURN ON CAPTIAL EMPLOYEDEMPLOYED 24.59% 29.93% 30.86% 0.00% 10.00% 20.00% 30.00% 40.00% 2009 2010 2011 ROCE A higher value of return on capital employed is favourable indicating that the company generates more earnings per rupee of capital employed. Fringe benefit tax (employment benefit tax) was nil in 2010
    • 10. EARNING PER SHAREEARNING PER SHARE 32.45 36.29 45.89 0 10 20 30 40 50 2009 2010 2011 EPS The EPS of Novartis India is increasing which indicates it is increasing its profitability .
    • 11. TOTAL AND FIXED ASSESTTOTAL AND FIXED ASSEST TURNOVER RATIOTURNOVER RATIO In 2011, loans and advances increase (CA). Investments (FA) were less in 2011 as compare to 2010.
    • 12. 2009 2010 2011 Shareholders’ Funds 5,147,405 5,934,606 7,029,876 Capital 159,804 159,804 159,804 Reserves and Surplus 4,987,601 5,774,802 6,870,072 Unsecured Loans 2,980 2,690 1,971 fixed asset 2009 2010 2011 Gross Block 227,999 233,475 241,529 Less: Depreciation/Amortisation 141,758 155,522 161,963 Net Block 86,241 77,953 79,566 Capital Work-in-Progress 672 7,552 7,319 86,913 85,505 86,885 Investments 233,929 157,505 412 Deferred Taxation 138,886 154,959 157,645 Current Assets, Loans and Advances 6,233,433 7,207,456 8,595,828 Inventories 501,026 513,750 536,116 Sundry Debtors 454,854 463,228 603,824 Cash and Bank Balances 537,536 571,888 884,656 Loans and Advances 4,740,017 5,658,590 6,571,232 Less: C urrent Liabilities and Provisions 1,542,776 1,668,129 1,808,923 Liabilities 892,400 1,144,632 996,914 Provisions 650,376 664,291 671,215 Net Current Assets 4,690,657 5,539,327 6,786,905 NET SALES 5,994,802 6,241,030 7,086,426 Balance Sheet as at 31st March 2011
    • 13. 2009 2010 2011 Inventories 501,026 513,750 536,116 Sundry Debtors 454,854 463,228 603,824 Cash and Bank Balances 537,536 571,888 884,656 Loans and Advances 4,740,017 5,658,590 6,571,232 Current Assets, Loans and Advances 6,233,433 7,207,456 8,595,828 Buildings 25,200 24,217 22,429 Plant and Machinery 35,348 29,383 33,527 Furniture and Fittings 15,056 14,087 16,414 Trade Marks@ 1,929 1,492 1,121 Vehicles 8,708 8,774 6,075 Capital Workin- 672 7,552 7,319 Progress (including advances for capital expenditure) Total fixedassets 86,913 85,505 86,885 Total asset 6,320,346 7,292,961 8,682,713 COMMON SIZE STATEMENT B/S (ASSETS)
    • 14. 2009 2010 2011 Inventories 7.93 7.04 6.17 Sundry Debtors 7.20 6.35 6.95 Cash and Bank Balances 8.50 7.84 10.19 Loans and Advances 75.00 77.59 75.68 Current Assets, Loans and Advances 98.62 98.83 99.00 Buildings 0.40 0.33 0.26 Plant and Machinery 0.56 0.40 0.39 Furniture and Fittings 0.24 0.19 0.19 Trade Marks@ 0.03 0.02 0.01 Vehicles 0.14 0.12 0.07 Capital Workin- 1.36 0.10 0.08 Progress (including advances for capital expenditure) Total fixedassets 1.38 1.17 1.00 Total asset 100.00 100.00 100.00 COMMON SIZE STATEMENT B/S (ASSETS)
    • 15. Packaging material, WIP,RM FG. Deposit A/C high
    • 16. Advances for capital expenditure were high 2011 Depreciation and Amortisation on assets
    • 17. Common size statement B/S (2)Common size statement B/S (2) 2009 2010 2011 Total current liabilities 27.32 25.36 23.09 Long term debt 0.05 0.04 0.03 Total liability 27.38 25.40 23.09 Retained earnings 42.42 46.78 51.76 Shareholders equity 2.83 2.43 2.04 Total liability and shareholders Equity 100.00 100.00 100.00
    • 18. Balance Sheet as at 31st March 2011 2009 2010 2011 Shareholders’ Funds 5,147,405 5,934,606 7,029,876 Capital 159,804 159,804 159,804 Reserves and Surplus 4,987,601 5,774,802 6,870,072 Unsecured Loans 2,980 2,690 1,971 fixed asset 2009 2010 2011 Gross Block 227,999 233,475 241,529 Less: Depreciation/Amortisation 141,758 155,522 161,963 Net Block 86,241 77,953 79,566 Capital Work-in-Progress 672 7,552 7,319 86,913 85,505 86,885 Investments 233,929 157,505 412 Deferred Taxation 138,886 154,959 157,645 Current Assets, Loans and Advances 6,233,433 7,207,456 8,595,828 Inventories 501,026 513,750 536,116 Sundry Debtors 454,854 463,228 603,824 Cash and Bank Balances 537,536 571,888 884,656 Loans and Advances 4,740,017 5,658,590 6,571,232 Less: Current Liabilities and Provisions 1,542,776 1,668,129 1,808,923 Liabilities 892,400 1,144,632 996,914 Provisions 650,376 664,291 671,215 Net Current Assets 4,690,657 5,539,327 6,786,905 NET SALES 5,994,802 6,241,030 7,086,426
    • 19. Trend analysis B/STrend analysis B/S2009 2010 2011 Shareholders’ Funds 100 115.29 136.57 Capital 100 100.00 100.00 Reserves and Surplus 100 115.78 137.74 Unsecured Loans 100 90.27 66.14 fixed asset 100 100.05 100.10 Gross Block 100 102.40 105.93 Less: Depreciation/Amortisation 100 109.71 114.25 Net Block 100 90.39 92.26 Capital Work-in-Progress 100 1123.81 1089.14 100 98.38 99.97 Investments 100 67.33 0.18 Deferred Taxation 100 111.57 113.51 Current Assets, Loans and Advances 100 115.63 137.90 Inventories 100 102.54 107.00 Sundry Debtors 100 101.84 132.75 Cash and Bank Balances 100 106.39 164.58 Loans and Advances 100 119.38 138.63 Less: C urrent Liabilities and Provisions 100 108.13 117.25 Liabilities 100 128.26 111.71 Provisions 100 102.14 103.20 Net Current Assets 100 118.09 144.69 NET SALES 100 104.11 118.21
    • 20. Advances for capital expenditure were high 2011
    • 21. P & L Account 2009 2010 2011 Income       gross sales 6,025,230 6,252,303 7,100,668 Excise Duty on Sales 30,428 11,273 14,242 Net Sales 5,994,802 6,241,030 7,086,426 Other Income 659,985 779,584 1,005,879 Income 6,654,787 7,020,614 8,092,305 Expenditure       Materials Cost 6,654,787 2,506,749 2,733,088 Personnel Cost 704,855 2,506,749 2,733,088 Other Expenses 1,756,234 1,848,265 2,081,584 Interest 7,059 3,179 2,802 Depreciation/Amortisation 26,884 22,513 23,823 Less: Cost of services shared 46,759 5,956 1,873 Expenditure 4,972,428 5,228,565 5,905,061         Profit before Taxation 1,729,118 1,798,005 2,189,117 Provision for Taxation 692,021 638,113 722,391 Profit afterTaxation 1,037,097 1,159,892 1,466,726 previous year balance 1,357,829 1,917,291 2,588,503   2,394,926 3,077,183 4,055,229 Appropriations 477,635 488,680 518,129         Balance carried to Balance Sheet 1917291.00 2588503.00 3537100.00 Earnings per Share 32.45 36.29 45.89 P&L STATEMENT 2009-2011
    • 22. 2010 2011 gross sales 103.7687026 117.848912 Excise Duty on Sales 37.04811358 46.80557381 Net Sales 104.1073583 118.2095088 Other Income 118.1214725 152.4093729 Income 105.4972007 121.6013 Materials Cost 37.66835813 41.0695038 Personnel Cost 355.6403799 387.7518071 Other Expenses 105.240247 118.5254357 Interest 45.03470747 39.69400765 Depreciation/Amortisation 83.74125874 88.61404553 Less: Cost of services shared 12.73765478 4.005645972 Expenditure 105.1511455 118.7560886 Profit before Taxation 103.9839386 126.6031005 Provision for Taxation 92.21006299 104.3885951 Profit after Taxation 111.8402618 141.4261154 previous year balance 141.2026846 190.6354187 128.4876025 169.3258581 Appropriations 102.3124352 108.4780219 Balance carried to Balance Sheet 135.0083529 184.4842541 Earnings per Share 111.8335901 141.4175655 Trend Analysis P/L (1)2009-2011
    • 23. COMMON SIZE STATMENT P/LCOMMON SIZE STATMENT P/L 2009 2010 2011 Gross sales 100.51 100.18 100.20 Excise Duty on Sales 0.51 0.18 0.20 Net Sales 100.00 100.00 100.00 Other Income 11.01 12.49 14.19 Income 111.01 112.49 114.19 2009 2010 0.00 Materials Cost 111.01 40.17 38.57 Personnel Cost 11.76 40.17 38.57 Other Expenses 29.30 29.61 29.37 Interest 0.12 0.05 0.04 Depreciation/Amortisati on 0.45 0.36 0.34 Less: Cost of services shared 0.78 0.10 0.03 Expenditure 82.95 83.78 83.33 2009 2010 0.00 Profit before Taxation 28.84 28.81 30.89 Provision for Taxation 11.54 10.22 10.19 Profit after Taxation 17.30 18.58 20.70 previous year balance 22.65 30.72 36.53 2009 2010 57.23 Appropriations 7.97 7.83 7.31 0.00 Balance carried to Balance Sheet 31.98 41.48 49.91
    • 24. Material cost decreased
    • 25. Share holding Share holding pattern as on : 30/06/2013 31/05/2013 31/03/2013 Face value 5 5 5 No. Of Shares % Holding No. Of Shares % Holding No. Of Shares % Holding Promoter's holding Foreign Promoters 23970597 75 23970597 75 24424802 76.42 Sub total 23970597 75 23970597 75 24424802 76.42 Non promoter's holding Institutional investors Banks Fin. Inst. and Insurance 296745 0.93 296745 0.93 296745 0.93 FII's 746256 2.33 705368 2.21 658549 2.06 Sub total 1088899 3.41 1002986 3.14 973479 3.05 Other investors Private Corporate Bodies 1020645 3.19 1235778 3.87 739435 2.31 NRI's/OCB's/Foreign Others 171734 0.54 162184 0.51 162217 0.51 Others 1444 - 1444 - 1444 - Sub total 1193613 3.73 1399196 4.38 902886 2.82 General public 5707478 17.86 5587808 17.48 5659420 17.71 Grand total 31960587 100 31960587 100 31960587 100