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BRAND VALUATION
January 5, 2015
About Caplin Point Laboratories
• Sector: Pharmaceutical
• Positioning: Generic drugs manufacturer with low
pricing strate...
Competitive Scenario
Sub-Sector
(Generic Drugs)
Brand
(Caplin)
Primary Competitor
Analgesic & Antipyretic Arcet Syrup Kamp...
Selecting Competitors
• Cipla and Lupin have been considered as top competitors
focused on branded drugs in the pharmaceut...
Score Top 10 Top 20 Top 30 Top 40 Top 50 Top 60 Top 70 Top 80
Factor 9 8 7 6 5 4 3 2
Market
Share
CIPLA - 2nd Rank - 8.55 ...
Time in Market
Company
Name
No of Years Started in
Caplin Point 24 yrs 1990
Cipla 79 yrs 1935
Lupin 46 yrs 1986
Oldest Pla...
Company
Name
Sales Turnover
(in crores INR)
Rank Market
Share ( %)
Caplin Point 166.4 68 0.15
Cipla
9380.29
2 8.52
Lupin 8...
Company Name Gross Profit
(in Cr. INR)
Rank
Caplin Point 36.74 68th
Cipla 2,141.95 4th
Lupin 3306.72 2nd
Market Position
R...
Brand
(CAGR)
Mar '14 Mar '13 Mar '12 Average
Caplin Point
Sales Turnover 166.40 122.67 108.72
132.60
% Growth 35.65 12.83 ...
Company Name Reach Presence
Caplin Point
Market mainly based on Latin
America, Africa and S.E Asia
Setting up their own di...
Price Premium
Range Score: 2/10
Brands Price premium Reason
Caplin Point Low Low premium is charged so as to sell
generic ...
Price Elasticity
Range Score: 3/10
Rediff.com
• Pharmaceutical sector is Highly Price Inelastic
• Medicines are necessity ...
Marketing Spend
Range Score: 4/10
Balance Sheets – Cipla, Caplin, Lupin
Brands Year
Sales Turnover
14
Marketing spend
(cr)...
Advertising Awareness
Sample Size: 20
Survey Conducted
Range Score: 5/10
Brands Advertising Awareness
Caplin Point The bra...
Brand Awareness
Range Score: 5/10
Survey Conducted
Brands Brand Awareness
Caplin Point The brand seems to be performing fa...
Brand Strength Index
Factor Score
Time in Market 3
Distribution 7
Market Share 3
Market Position 3
Sales Growth Rate 8
Pri...
ET Now interview with chairman C.C.Paarthipan
http://youtu.be/iK7zKmX7ahQ
Brand Strength Index
Market Cap v/s Sales
Market Capital 604.32 cr
Sales turnover 166.4 cr
Sales Growth Rate 35.65%
PE Ind...
Insights & Actions
Perception about company
 Investors are bullish about the company’s growth
 High expectation but sale...
Thank you!
Made by -
Sanika Deshpande - sanika.deshpande15@simc.edu
Neha Mistry – neha.mistry15@simc.edu
Reena Jagtap – re...
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Brand Valuation of an Indian pharmaceutical company Caplin Point

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Brand valuation is the job of estimating the total financial value of the brand. The Industry Project was based on estimating the brand value of the pharmaceutical company in India using Royalty Relief Model & Inter brand Approach

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Brand Valuation of an Indian pharmaceutical company Caplin Point

  1. 1. BRAND VALUATION January 5, 2015
  2. 2. About Caplin Point Laboratories • Sector: Pharmaceutical • Positioning: Generic drugs manufacturer with low pricing strategy • Market Share : 0.15% • Business Divisions: Pharmacy • Objective – Top Line Evaluation CAPLIN POINT stands for Capsules, Injections, Ointment
  3. 3. Competitive Scenario Sub-Sector (Generic Drugs) Brand (Caplin) Primary Competitor Analgesic & Antipyretic Arcet Syrup Kampala – Kamadol Syrup Anti-Bacterial Quinomeg Tablets Regal - Uriseptic Anti-Rheumatic Mayfenamic Capsules Lupin – Meflup Forte Anti - Spasmodic Trophine Injection Intas - Atrisol Anti - Tubercular Mayrif Capsules Lupin – R-CIN Antibiotic Avicillin-250 Injection Kampala – Kam-Ampi Anti - Viral Avivir Tablets Cadila - Cyclovir Anti-Diabetic Mayglin Tablets Cadila – Betanase Tablets Bronchodilator Aminophylline Tablets Fredun – Neophil -100 Cortisone Emcort Tablets Cadila - Dexona
  4. 4. Selecting Competitors • Cipla and Lupin have been considered as top competitors focused on branded drugs in the pharmaceutical sector • Cipla is primarily patent drug company, whereas Caplin Point is specialized in generic drug production • Unavailability of mid cap generic drug manufacturer data • The other players in the Indian Pharma market – – Dr Reddy’s Lab – Ranbaxy Labs – Cadila Health – GlaxoSmithKline – Sun Pharma Adv – Biocon Rediff.com – Abbott India – Aurobindo Pharma – Pfizer
  5. 5. Score Top 10 Top 20 Top 30 Top 40 Top 50 Top 60 Top 70 Top 80 Factor 9 8 7 6 5 4 3 2 Market Share CIPLA - 2nd Rank - 8.55 % CAPLIN POINT - 68th Rank - 0.15% LUPIN - 3rd Rank - 8.15% Sales Growth CAPLIN POINT - 12th Rank - 35.65% CIPLA - 44th Rank -14.36% LUPIN - 19th Rank - 25.51% Time in Market CIPLA - 3rd Rank - 79 yrs LUPIN - 42nd rank 28 yrs CAPLIN POINT - 61st Rank - 24 yrs Analysis
  6. 6. Time in Market Company Name No of Years Started in Caplin Point 24 yrs 1990 Cipla 79 yrs 1935 Lupin 46 yrs 1986 Oldest Player is Alembic Pharma started back in 1907 – 107 yrs Range Score: 3 /10
  7. 7. Company Name Sales Turnover (in crores INR) Rank Market Share ( %) Caplin Point 166.4 68 0.15 Cipla 9380.29 2 8.52 Lupin 8939.38 3 8.12 Market Share Range Score: 3/10 Ref- Money control.com Findings – Total revenue - 1,09,707.29 ( 28th December 2014) We are looking into expanding and acquiring position of large market cap companies, therefore we have compared it with Cipla and Lupin Caplin Point comes under top 70 listed companies category while Cipla & Lupin under top 10 w.r.t market share
  8. 8. Company Name Gross Profit (in Cr. INR) Rank Caplin Point 36.74 68th Cipla 2,141.95 4th Lupin 3306.72 2nd Market Position Range Score: 3/10 The Gross profit is far less as compared to Cipla & Lupin Market Position based on Market Share Caplin falls under Top 70 category
  9. 9. Brand (CAGR) Mar '14 Mar '13 Mar '12 Average Caplin Point Sales Turnover 166.40 122.67 108.72 132.60 % Growth 35.65 12.83 35.90 28.13 Cipla Sales Turnover 9,380.29 8,202.42 6,977.50 8186.74 % Growth 14.36 17.56 10.21 14.04 Lupin Sales Turnover 8,939.38 7,122.51 5,384.83 7148.91 % Growth 25.51 32.27 19.80 25.86 Sales Growth Rate Range Score: 8/10 Ref : Moneycontrol.com Rate Growth (%) = (Sales Turnover)current – (Sales Turnover)previous / (Sales Turnover)previous * 100
  10. 10. Company Name Reach Presence Caplin Point Market mainly based on Latin America, Africa and S.E Asia Setting up their own distribution office across globe has helped them to build higher margin Cipla North America, South America, Europe, Middle East , Australia & Africa Regular exports to more than 170 countries Lupin 283 distribution, 90,000 physicians across 12 specialties Mexico Latin America Philippines, Australia, South Africa, Japan, India Distribution Range Score: 7 /10 They not only manufacture and export but also control the distribution resulting in controlled cashflow and higher profit margins Ref : Caplin, Lupin ,Cipla
  11. 11. Price Premium Range Score: 2/10 Brands Price premium Reason Caplin Point Low Low premium is charged so as to sell generic drugs in international market Cipla Relatively High To cover up research and infrastructure cost, high price is attached to their niche patent drugs e.g. HIV and cancer Lupin High More premium charged on their patent drugs and branded generic but less on generic drugs Note - Since the product belongs to generic drug category, the score is 2 but if products belong to brand premium it can get better score
  12. 12. Price Elasticity Range Score: 3/10 Rediff.com • Pharmaceutical sector is Highly Price Inelastic • Medicines are necessity goods • Demand is not price driven Reference: http://myindustrygroupblog.wordpress.com/2012/10/08/the-push-and-pull-of-the- pharmaceutical-industry/
  13. 13. Marketing Spend Range Score: 4/10 Balance Sheets – Cipla, Caplin, Lupin Brands Year Sales Turnover 14 Marketing spend (cr) (%) Caplin Point 2014 166.4 1.538 0.924 2013 122.67 1.03 0.839 Cipla 2014 9,380.29 258.71 2.758 2013 8202.42 177.77 2.166 Lupin 2014 8,939.38 505.71 5.657 2013 7,122.51 468.07 6.571 Note - Caplin Point & Cipla has increased their marketing spend by 0.09 % & 0.5 % respectively Lupin reduced by - 0.9 %
  14. 14. Advertising Awareness Sample Size: 20 Survey Conducted Range Score: 5/10 Brands Advertising Awareness Caplin Point The brand seems to be performing fairly well with respect to this parameter Cipla 50 % percent of our sample has been exposed to advertisement Lupin 15% percent of our sample is aware * Disclaimer –Caplin Point Laboratories Ltd. has been scored on Advertising awareness based on the data with respect to the countries that Caplin Point is present in and the brand seems to be performing fairly well with respect to this parameter.
  15. 15. Brand Awareness Range Score: 5/10 Survey Conducted Brands Brand Awareness Caplin Point The brand seems to be performing fairly well with respect to this parameter. Cipla 75 % percent of our sample size is aware Lupin 65% percent of our sample size is aware Sample Size: 20 * Disclaimer –Caplin Point Laboratories Ltd. has been scored on Brand awareness based on the data with respect to the countries that Caplin Point is present in and the brand seems to be performing fairly well with respect to this parameter.
  16. 16. Brand Strength Index Factor Score Time in Market 3 Distribution 7 Market Share 3 Market Position 3 Sales Growth Rate 8 Price Premium 2 Price Elasticity 3 Marketing Spend 4 Advertising Awareness 5 Brand Awareness 5 Total 43
  17. 17. ET Now interview with chairman C.C.Paarthipan http://youtu.be/iK7zKmX7ahQ
  18. 18. Brand Strength Index Market Cap v/s Sales Market Capital 604.32 cr Sales turnover 166.4 cr Sales Growth Rate 35.65% PE Indicators Company 19.88 Industry 24.04 RR Indicators Company 4.53-5.05 Industry 4.50% Brand Beta Score 43 Interbrand Score 59 Multiple 4.835
  19. 19. Insights & Actions Perception about company  Investors are bullish about the company’s growth  High expectation but sales turnover is not good  Need to push sales turnover by creating brand awareness and promotion in the respective geographical market Marketing by company  Marketing spends hardly consists of 0.924 % of sales turnover of the company while competitors spends are around 5-7% of sales turnover  In order to push sales turnover further, increase in marketing activities with right set of mix is essential in the respective market Brand Developments  Reaching out to the consumers at every touch point is essential as company falls under B2C  Brand development is important as the efforts of sales teams in encouraging purchase orders
  20. 20. Thank you! Made by - Sanika Deshpande - sanika.deshpande15@simc.edu Neha Mistry – neha.mistry15@simc.edu Reena Jagtap – reena.jagtap15@simc.edu Shikha Sharma – shikha.sharma15@simc.edu Sumam Philips – sumam.philips15@simc.edu

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