The document provides an overview of Ranbaxy Laboratories, India's largest pharmaceutical company. It discusses Ranbaxy's history, products, markets, and financials. Ranbaxy was founded in 1961 and initially prepared and packaged drugs for other companies but has since become a fully independent research-based pharmaceutical firm with manufacturing sites in several countries and a major focus on generics. Its top markets are the US, Europe, and India and it posted $1.18 billion in revenues in 2004. The company remains controlled by its founding Singh family.
A Comparative Study between Public and Private Housing Finance Companies (HFC...Dr. Amarjeet Singh
A house is a basic necessity, a symbol of security, and
a measure of socioeconomic status and pride. In India the
policy reforms in the housing sector have led to an increase in
the number of banking and non-banking financial institutions
providing different types of housing finance services. In this
regard, the public (HFCs) and private HFCs are operating at
different levels to provide housing finances to all the sections
of society. The present study is an attempt to comparatively
analyze the financial performance of five public HFCs and five
private HFCs in India for the period of 2009-2018. The
collected data were analyzed using descriptive statistics in the
form of means and a student t-test was conducted to compare
the performance of public and private HFCs with regard to
various financial ratios. The result showed that profitability,
and operating ratios significantly influenced the financial
performance of public and private HFCs. The present study
calls for regulatory measures and policy reforms to improve
the profitability and operating efficiency of both public and
private HFCs. This study has an implication in improving the
housing finance sector from the perspective of Indian HFCs.
The Effect of Capital Structure on Firm Performance: Empirical Evidence from ...inventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
The primary function of financial institution’s to lend funds as loans to various sectors such as agriculture, industry, personal loans, housing loans etc., in recent times the institutions have become very cautious in extending loans. The reason being mounting non-performing assets (NPAs). An NPA is defined as a loan asset, which has ceased to generate any income for a bank whether in the form of interest or principal repayment. In order to study the menace of NPA, Kerala Financial Corporation (KFC) the premier institution which provides long term finance for industrial enterprises and assistance to the sick units for the rehabilitation purpose has been selected. NPA is a serious problem faced by KFC. Non- performance in a loan asset is the bane of the financial institutions in India. It is the universal problem and can cripple the economy of any nation. Mounting non-performing assets in a banking sector was the main reason for the financial crisis in the South East Asian countries. The Net NPA of KFC as per the records shows a declining trend. There is a tendency among the beneficiaries of the corporation to delay repayment of the loans and some percentage of these payments also turns into bad debts. The NPA and loans and advances are negatively correlated. It shows that while the amount of loan increases over the years, NPA shows a declining trend. The total amount of loan increased year by year, because corporation introduces variety of new loan schemes.
The difficulty in getting the right type of finance at the right time and in the right quantity continues to haunt the small entrepreneurs and still ranks first among the major problems faced by the small sector. This being the situation, it has become relevant to conduct a study aimed at evaluating. the role and performance of the SFCs. A detailed study on the role of the KFC in the industrialisation of Kerala is highly worthwhile especially in the period of global recession. . Various provisions of the SFCs Act enjoin on the KFC to undertake the stupendous task of industrial development in the State concerned by providing long-term credit to the MSME segment. The study based on secondary data. Secondary data were collected from various official records and reports. The KFC still functions as a Government undertaking. The majority of its shares in value are held by the Government of Kerala (97.06 per cent). Its capital structure consists of both own capital and borrowed capital. It gives more weightage to debt capital. Capital to Risk - weighted Assets Ratio (CRAR) was at 21.57 % during the year 2013-14, as against the minimum of 9% prescribed. , Corporation could make significant improvement in its performance in all major operational areas, viz, Sanction, (AAG 44.51)Disbursement(AAG38.16) and Recovery(AAG12.22). Schemes of financial assistance of the Corporation cover a series of activities ranging from manufacture to marketing of goods and services. Regarding the trend of loan operations, the role of the KFC in the process of industrialisation is found to be increasing year by year as the total amount disbursed
NBFC's have played a key role in financing the needs of the Indian industry especially the small and medium enterprises and the small entrepreneurs, both in the urban and the rural areas. While the under-penetration of banking network, rising affluence, large working age population and rising need for financial services point to the tremendous potential for the growth of NBFC's. A vigorous banking and financial sector is critical for facilitating higher economic growth. Financial intermediaries like Non-Banking Financial Companies (NBFCs) constitute a significant element of the financial system and have penetrated into those areas where banks did not dare by taking both the operational and regulatory risks. NBFCs form an integral part of the Indian financial system. They have been very instrumental in contribution to the Government’s agenda of financial inclusion by filling the important gap of supplying credit to retail customers in the relatively under-served and un-banked areas. They play an active complementary role to the banking system by broadening access to financial services, enhancing competition and diversification of financial sector. NBFCs are known for their higher risk taking capacity than the banks. The intention of this study is to analyze the investment strategies of non-bank finance companies (NBFCs) which are providing the financial services.
A Comparative Study between Public and Private Housing Finance Companies (HFC...Dr. Amarjeet Singh
A house is a basic necessity, a symbol of security, and
a measure of socioeconomic status and pride. In India the
policy reforms in the housing sector have led to an increase in
the number of banking and non-banking financial institutions
providing different types of housing finance services. In this
regard, the public (HFCs) and private HFCs are operating at
different levels to provide housing finances to all the sections
of society. The present study is an attempt to comparatively
analyze the financial performance of five public HFCs and five
private HFCs in India for the period of 2009-2018. The
collected data were analyzed using descriptive statistics in the
form of means and a student t-test was conducted to compare
the performance of public and private HFCs with regard to
various financial ratios. The result showed that profitability,
and operating ratios significantly influenced the financial
performance of public and private HFCs. The present study
calls for regulatory measures and policy reforms to improve
the profitability and operating efficiency of both public and
private HFCs. This study has an implication in improving the
housing finance sector from the perspective of Indian HFCs.
The Effect of Capital Structure on Firm Performance: Empirical Evidence from ...inventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
The primary function of financial institution’s to lend funds as loans to various sectors such as agriculture, industry, personal loans, housing loans etc., in recent times the institutions have become very cautious in extending loans. The reason being mounting non-performing assets (NPAs). An NPA is defined as a loan asset, which has ceased to generate any income for a bank whether in the form of interest or principal repayment. In order to study the menace of NPA, Kerala Financial Corporation (KFC) the premier institution which provides long term finance for industrial enterprises and assistance to the sick units for the rehabilitation purpose has been selected. NPA is a serious problem faced by KFC. Non- performance in a loan asset is the bane of the financial institutions in India. It is the universal problem and can cripple the economy of any nation. Mounting non-performing assets in a banking sector was the main reason for the financial crisis in the South East Asian countries. The Net NPA of KFC as per the records shows a declining trend. There is a tendency among the beneficiaries of the corporation to delay repayment of the loans and some percentage of these payments also turns into bad debts. The NPA and loans and advances are negatively correlated. It shows that while the amount of loan increases over the years, NPA shows a declining trend. The total amount of loan increased year by year, because corporation introduces variety of new loan schemes.
The difficulty in getting the right type of finance at the right time and in the right quantity continues to haunt the small entrepreneurs and still ranks first among the major problems faced by the small sector. This being the situation, it has become relevant to conduct a study aimed at evaluating. the role and performance of the SFCs. A detailed study on the role of the KFC in the industrialisation of Kerala is highly worthwhile especially in the period of global recession. . Various provisions of the SFCs Act enjoin on the KFC to undertake the stupendous task of industrial development in the State concerned by providing long-term credit to the MSME segment. The study based on secondary data. Secondary data were collected from various official records and reports. The KFC still functions as a Government undertaking. The majority of its shares in value are held by the Government of Kerala (97.06 per cent). Its capital structure consists of both own capital and borrowed capital. It gives more weightage to debt capital. Capital to Risk - weighted Assets Ratio (CRAR) was at 21.57 % during the year 2013-14, as against the minimum of 9% prescribed. , Corporation could make significant improvement in its performance in all major operational areas, viz, Sanction, (AAG 44.51)Disbursement(AAG38.16) and Recovery(AAG12.22). Schemes of financial assistance of the Corporation cover a series of activities ranging from manufacture to marketing of goods and services. Regarding the trend of loan operations, the role of the KFC in the process of industrialisation is found to be increasing year by year as the total amount disbursed
NBFC's have played a key role in financing the needs of the Indian industry especially the small and medium enterprises and the small entrepreneurs, both in the urban and the rural areas. While the under-penetration of banking network, rising affluence, large working age population and rising need for financial services point to the tremendous potential for the growth of NBFC's. A vigorous banking and financial sector is critical for facilitating higher economic growth. Financial intermediaries like Non-Banking Financial Companies (NBFCs) constitute a significant element of the financial system and have penetrated into those areas where banks did not dare by taking both the operational and regulatory risks. NBFCs form an integral part of the Indian financial system. They have been very instrumental in contribution to the Government’s agenda of financial inclusion by filling the important gap of supplying credit to retail customers in the relatively under-served and un-banked areas. They play an active complementary role to the banking system by broadening access to financial services, enhancing competition and diversification of financial sector. NBFCs are known for their higher risk taking capacity than the banks. The intention of this study is to analyze the investment strategies of non-bank finance companies (NBFCs) which are providing the financial services.
Effect of operating, financial and total leverage on expected stock return an...Shoaib Lalani
Regardless of the size and nature, largely all businesses are dependent on leverage. This research called for analyzing the impact of leverage on equity elements like the earnings to price ratio, Market value of equity and book to market ratio. Later on we also tested to identify the relationship between leverage and on expected stock returns. Financial data for different companies ranging in their own sectors was collected and then financial data from 2002 to 2012 was used to run pooled regression in order to find out any existing relationship
The results were pretty astonishing as it was proved that leverage had no impact on either of the equity elements. Nevertheless, a relationship could be identified between leverage and expected stock returns. Hence it will be safe to conclude that Pakistan’s economy is shortsighted and consumption oriented and that profits and earnings of companies in Pakistan are highly financed by their respective revenues. But nevertheless judgments about a particular sector couldn’t be made as this report has various business sectors of Pakistan.
Financial Structure and the Financial Performance of Quoted Consumer Goods Fi...ijtsrd
The study investigated the effect of financial structure on the financial performance of quoted consumer goods firms in Nigeria. The study used profit after tax PAT to represented financial performance as the dependent variable while financial structure was disintegrated into Short Term Debt STD , Long Term Debt LTD , share capital SC and retained earnings RE as the independent variable. The data for the study were obtained from the Financial Statement and Annual Reports of the selected firms. The data set comprised fifty 50 observations comprising five year time series data spanning 2010 to 2019 from ten firms in the consumer goods sector. The panel regression technique based on Fixed and Random Effects were used for data analyses. The Hausman test showed that the Fixed Effect model is more suitable for the study. The findings revealed that STD and SC have significant positive effects on the PAT of consumer goods firms in Nigeria while LTD and RE were found to have positive but no significant effect on the PAT of consumer goods firms in Nigeria. The study conclude that b working capital management is an efficient tool for the consumer goods subsector in Nigeria. Among the contributions of the study is the use of all the four sources of funds and the use of profit after tax that tends to capture the overall effect of the various fund sources on the holistic profitability of the consumer goods firms. The recommendations included use of share capital for long term investment and working capital management for operations. Daniel, Prince Chinwendu | Dr. Joseph A. Nduka "Financial Structure and the Financial Performance of Quoted Consumer Goods Firms in Nigeria" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-5 | Issue-1 , December 2020, URL: https://www.ijtsrd.com/papers/ijtsrd37967.pdf Paper URL : https://www.ijtsrd.com/management/accounting-and-finance/37967/financial-structure-and-the-financial-performance-of-quoted-consumer-goods-firms-in-nigeria/daniel-prince-chinwendu
Understanding Stock Returns as a Combination of Speculative and Fundamental G...ijtsrd
The Indian stock market returns are largely speculative in nature. Taking twenty stocks off of the Sensex, the Total return of the stock was split into the fundamentally arising returns and the speculative return. This revealed the speculative nature of the Indian Stock market. What this means is that, the good stocks with strong fundamentals may have a low total return as a result of low speculative returns, similarly fundamentally weak stocks may potentially have high speculative returns, resulting in high total returns. Thus, a bifurcation of this sort can help investors with different investment objectives, horizons and risk appetite, invest to achieve their goals. Sanishtha Bhatia | Anshika Lara | Danvi Shah | Shanav Jalan | Shreejit Sawant "Understanding Stock Returns as a Combination of Speculative and Fundamental Growth: An Emperical Study" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-4 | Issue-5 , August 2020, URL: https://www.ijtsrd.com/papers/ijtsrd31742.pdf Paper Url :https://www.ijtsrd.com/economics/finance/31742/understanding-stock-returns-as-a-combination-of-speculative-and-fundamental-growth-an-emperical-study/sanishtha-bhatia
The last two years have been very positive for the asset management industry in India, with the industry’s assets under management (AuM) scaling new peaks regularly. We believe that there is a long-term growth story for the Mutual Fund industry led by Retail investors particularly through the Systematic Investment Plan (SIP) route. The macroeconomic enablers like stable government, declining inflation, fiscal discipline and reform initiatives by the Government and Regulators, indicate that a GDP growth rate between 6.5 to 8 percent may be sustained over the next decade.
However, there is a huge potential market which needs to be tapped by the Mutual Fund Industry, which stands at only 11 percent of the GDP. The industry still needs to reach out to investors in smaller towns where MF penetration is much lower. Key challenges to the growth of MFs are low consumer awareness and trust, limited distribution network restricted to the top few centres, and a lack of innovative products.
what is the future of Pi Network currency.DOT TECH
The future of the Pi cryptocurrency is uncertain, and its success will depend on several factors. Pi is a relatively new cryptocurrency that aims to be user-friendly and accessible to a wide audience. Here are a few key considerations for its future:
Message: @Pi_vendor_247 on telegram if u want to sell PI COINS.
1. Mainnet Launch: As of my last knowledge update in January 2022, Pi was still in the testnet phase. Its success will depend on a successful transition to a mainnet, where actual transactions can take place.
2. User Adoption: Pi's success will be closely tied to user adoption. The more users who join the network and actively participate, the stronger the ecosystem can become.
3. Utility and Use Cases: For a cryptocurrency to thrive, it must offer utility and practical use cases. The Pi team has talked about various applications, including peer-to-peer transactions, smart contracts, and more. The development and implementation of these features will be essential.
4. Regulatory Environment: The regulatory environment for cryptocurrencies is evolving globally. How Pi navigates and complies with regulations in various jurisdictions will significantly impact its future.
5. Technology Development: The Pi network must continue to develop and improve its technology, security, and scalability to compete with established cryptocurrencies.
6. Community Engagement: The Pi community plays a critical role in its future. Engaged users can help build trust and grow the network.
7. Monetization and Sustainability: The Pi team's monetization strategy, such as fees, partnerships, or other revenue sources, will affect its long-term sustainability.
It's essential to approach Pi or any new cryptocurrency with caution and conduct due diligence. Cryptocurrency investments involve risks, and potential rewards can be uncertain. The success and future of Pi will depend on the collective efforts of its team, community, and the broader cryptocurrency market dynamics. It's advisable to stay updated on Pi's development and follow any updates from the official Pi Network website or announcements from the team.
Turin Startup Ecosystem 2024 - Ricerca sulle Startup e il Sistema dell'Innov...Quotidiano Piemontese
Turin Startup Ecosystem 2024
Una ricerca de il Club degli Investitori, in collaborazione con ToTeM Torino Tech Map e con il supporto della ESCP Business School e di Growth Capital
Even tho Pi network is not listed on any exchange yet.
Buying/Selling or investing in pi network coins is highly possible through the help of vendors. You can buy from vendors[ buy directly from the pi network miners and resell it]. I will leave the telegram contact of my personal vendor.
@Pi_vendor_247
how to sell pi coins at high rate quickly.DOT TECH
Where can I sell my pi coins at a high rate.
Pi is not launched yet on any exchange. But one can easily sell his or her pi coins to investors who want to hold pi till mainnet launch.
This means crypto whales want to hold pi. And you can get a good rate for selling pi to them. I will leave the telegram contact of my personal pi vendor below.
A vendor is someone who buys from a miner and resell it to a holder or crypto whale.
Here is the telegram contact of my vendor:
@Pi_vendor_247
What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the telegram contact of my personal pi merchant to trade with.
Tele-gram.
@Pi_vendor_247
The European Unemployment Puzzle: implications from population agingGRAPE
We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
Introduction to Indian Financial System ()Avanish Goel
The financial system of a country is an important tool for economic development of the country, as it helps in creation of wealth by linking savings with investments.
It facilitates the flow of funds form the households (savers) to business firms (investors) to aid in wealth creation and development of both the parties
Currently pi network is not tradable on binance or any other exchange because we are still in the enclosed mainnet.
Right now the only way to sell pi coins is by trading with a verified merchant.
What is a pi merchant?
A pi merchant is someone verified by pi network team and allowed to barter pi coins for goods and services.
Since pi network is not doing any pre-sale The only way exchanges like binance/huobi or crypto whales can get pi is by buying from miners. And a merchant stands in between the exchanges and the miners.
I will leave the telegram contact of my personal pi merchant. I and my friends has traded more than 6000pi coins successfully
Tele-gram
@Pi_vendor_247
when will pi network coin be available on crypto exchange.DOT TECH
There is no set date for when Pi coins will enter the market.
However, the developers are working hard to get them released as soon as possible.
Once they are available, users will be able to exchange other cryptocurrencies for Pi coins on designated exchanges.
But for now the only way to sell your pi coins is through verified pi vendor.
Here is the telegram contact of my personal pi vendor
@Pi_vendor_247
If you are looking for a pi coin investor. Then look no further because I have the right one he is a pi vendor (he buy and resell to whales in China). I met him on a crypto conference and ever since I and my friends have sold more than 10k pi coins to him And he bought all and still want more. I will drop his telegram handle below just send him a message.
@Pi_vendor_247
how to sell pi coins on Bitmart crypto exchangeDOT TECH
Yes. Pi network coins can be exchanged but not on bitmart exchange. Because pi network is still in the enclosed mainnet. The only way pioneers are able to trade pi coins is by reselling the pi coins to pi verified merchants.
A verified merchant is someone who buys pi network coins and resell it to exchanges looking forward to hold till mainnet launch.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
The secret way to sell pi coins effortlessly.DOT TECH
Well as we all know pi isn't launched yet. But you can still sell your pi coins effortlessly because some whales in China are interested in holding massive pi coins. And they are willing to pay good money for it. If you are interested in selling I will leave a contact for you. Just telegram this number below. I sold about 3000 pi coins to him and he paid me immediately.
Telegram: @Pi_vendor_247
Project in e i-c analysis @il&f invest smart stock ltd mba finance
1. TABLE OF CONTENTS
SL.No Particulars Page numbers
1. Executive Summary
2. Introduction to the Topic
3. Economic analysis
4. Industrial Analysis
5. Company analysis of Ranbaxy
6. Company Analysis of Cipla
7. Comparative Ratio Table of Ranbaxy
8. Comparative Ratio Table of Cipla
9. Findings
10. Annexures and Bibliography
BABASAB PATIL Page 1
2. Executive Summary
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. Thats why Economy analysis is
important. The output of the Economy analysis is a list of industries, which should perform
well, given the general trend of the economy and also an idea, whether to invest or not in the
given economic conditions.
Fundamental analysis is the analysis, wherein the investment decisions are taken on the basis
of the financial strength of the company. There are two approaches to fundamental analysis,
viz., E-I-C analysis or the Top Down approach to Fundamental analysis and C-I-E analysis or
the Bottom up approach. In the following section, we explain both these approaches.
The main objective of undertaking the project in E-I-C Analysis is :
• Measuring the performances of the company by calculating related ratios.
Sub Objectives :
• Predicting the future Sales, expected EPS , etc of the company.
• To measure the viability of the two companies.
BABASAB PATIL Page 2
3. Introduction to the Company:-
.IL&FS investsmart is India’s largest Financial Multiplex.It was Awarded as athe best
Financial Advisor in retail segment by CNBC TV in 2006.
IL&FS Investsmart Limited (IIL) is an initiative in the field of Financial Services started by
Infrastructure Leasing & Financial Services (IL&FS), an institution known for its innovative
and pioneering initiatives in the areas of Infrastructure, Corporate Finance and Investment
Banking. IIL was set up in October 1997 and began its retail operations in September 1998
IL&FS Investsmart Limited (IIL) was set up with the objective of becoming one of the
leading full service brokerage houses in the country with a strong expertise in web-based
technology as well as strengths in physical distribution. Today with a presence in more than
90 cities across India through more than 200 outlets, IIL has become one of the most
prominent players in the Financial Services Industry with service offerings across different
categories
Promoters and Shareholders of IL&FS Investsmart Limited
As mentioned earlier IIL which was promoted by IL&FS in 1997, has come a long way since
its inception. It is a matter of great pride for IIL that some of the world's biggest
organisations are becoming equity owners of the company
The stockholding pattern as of today involves IL&FS which holds 30.64% equity stake,
while Softbank Asia Infrastructure Fund L.P. (SAIF) and E*TRADE FINANCIAL, through
its wholly owned subsidiary
Retail business:-
BABASAB PATIL Page 3
4. The Retail Business Division at IIL is involved in dealing with a range of financial products
offered to customers across India through multiple locations. The retail business is further
categorised into various business divisions catering to varied needs of our customers. These
include divisions catering to customers for Investment options such as Equity Trading,
Derivatives Trading, Commodity Trading, IPO Investments, Fixed Income products, Mutual
Fund Investments as well as Insurance & Home Loans Advisory services. In addition we also
offer allied services to facilitate the investment process, like custodial and depository
services, which are offered through the IL&FS Depository Services. IIL's expertise across all
these categories enable it to respond to the varying needs of a demanding clientele ensuring
that their investment plans are executed as per their individual requirements
Merchant banking division
The Merchant Banking division offers a complete range of services which includes
management of IPOs, rights issues, buy back offers, open offers and private placements of
equity. Its extensive contact base and strong relationships developed with Venture Capital
Funds and Private Equity Funds for equity placements, contributes to an effective delivery
platform for its clients
Institutional Equity Business Division:-
Institutional Equity Business (IEB) thrives on strong relationships it has built among
domestic mutual funds, banks, financial institutions, insurance companies and private sector
funds over the past few years. IEB also has well-developed relationships among corporates,
leveraged from its institutional pedigree. Efficient execution, quality research and high
degree of compliance with stock exchange regulations and ethical business standards back
IEB’s services to institutional investors through IPOs, Equities, Derivatives and Mutual
Funds. IEB is well positioned to offer support to the complete range of investment banking
services to corporate
BABASAB PATIL Page 4
5. Debt broking division:-
The Debt division has an active presence in the secondary and primary debt placement
markets. It deals in various products including Government Securities, Treasury Bills, Bonds
and Debentures, State guaranteed papers and Commercial papers. It has strong realtionship
with Institutional clients such as Banks, Primary Dealers, Mutual Funds,
Project Syndication division:-
The Project Syndication division has been inherited from IL&FS. The syndication desk has
so far worked on Debt Syndication of various large Infrastructure Projects in the country.
The mandate includes Debt structuring of highly complex and difficult projects. Project
Syndication focuses on the role of an Arranger of Project and Structured loans. While fund
mobilisation services are provided across various areas, infrastructure sectors remain key
focus areas for syndication activity. The services under Project Syndication include project
loan syndication, structured debt syndication and debt restructuring. The syndication business
thrives on its extensive contact base and strong relationships developed over the years with
Banks and Financial Institutions
BABASAB PATIL Page 5
6. Introduction of topic.
To determine the intrinsic value of an equity share the security analyst must forecast
the earnings and the dividends expected from the stocks and choose a discount rate which
reflects the riskiness of the stock. This is what involved in the fundamental analysis which is
the most popular method used by the investments professionals.
The earnings potential and riskiness of the firm are linked to the prospects of the
industry to which it belongs. So the prospects of the various industries are largely influenced
by the developments in the macro economy.
The researchers have found that stock price changes can be attributed to the
following factors:
Economy wide factors: 30-35 percent.
Industry factors: 15-20 percent.
Company factors : 30-35 percent
Other factors: 15-25 percent
Based on the above evidence, a commonly advocated procedure of the fundamental analysis
involves a three- step examination .They are:
BABASAB PATIL Page 6
7. Understanding of the macro-economic environmental developments.
Analyzing the prospects of the industry to which the firm belongs.
Assessing the projected information of the company and the intrinsic value of its shares.
BABASAB PATIL Page 7
8. The Indian Pharmaceutical industry is highly fragmented with about 24,000 players (around
330 in the organised sector). The top ten companies make up for more than a third of the
market. The revenues generated by the industry are approximately US$ 7 bn and have grown
at an average rate of 10% over last five years. The Indian pharma industry accounts for about
1% of the world's pharma industry in value terms and 8% in volume terms.
In the recent past, Indian companies have targeted international markets and have extended
their presence there. While some companies are exporting bulk drugs, others have moved up
the value chain and are exporting formulations and generic products. India also offers
excellent exports opportunities for clinical trials, R&D, custom synthesis and technical
services like Bioinformatics.
The drug price control order (DPCO) continues to be a menace for the industry. There are
three tiers of regulations – on bulk drugs, on formulations and on overall profitability. This
has made the profitability of the sector susceptible to the whims and fancies of the pricing
authority. The new Pharmaceutical Policy 2006, which proposes to bring 354 essential drugs
under price control has not been officially passed as yet and has been stiffly opposed by the
pharmaceutical industry.
While the average R&D spending in India as a whole is a meager 2% of sales, the spend of
the top five companies is about 5% to 10%. Despite growing at a CAGR of over 50% over
the last four years, the ratio is still way below the global average of 15% to 20% of sales.
However, despite the
BABASAB PATIL Page 8
9. relatively low R&D spending, Indian companies are stepping up their research activities to
make themselves more self sufficient in terms of product development, now that the product
patent regime has come into force.
Supply:- Higher for traditional therapeutic segments, which is typical of a developing market.
Relatively lower for lifestyle segment.
Demand:- Very high for certain therapeutic segments. Will change as life expectancy,
literacy increases.
Barriers to entry:- Licensing, distribution network, patents, plant approval by regulatory
authority.
Bargaining power of suppliers:- Distributors are increasingly pushing generic products in a
bid to earn higher margins.
Bargaining power of customers:- High, a fragmented industry has ensured that there is
widespread competition in almost all product segments. (Currently also protected by the
DPCO).
Competition:- High fragmented industry with the to 300 (of 24000
Manufacturing units)players according for 85% of sales value.Consolidation is like to
intensify
Impact of BUDGET -2008:
Budget 2008-09: Pharmaceuticals
The past year has been tumultuous for the pharma industry, which has had to contend with a
steeply rising rupee, severe price erosion and regulatory changes in the global generics
markets and rise in raw material costs. Having said that, some positive developments also
ensured that the overall scenario was not too bad. These developments included
BABASAB PATIL Page 9
10. announcements by some major domestic pharma majors of hiving off their R&D units into
separate companies, bagging out-licensing deals with global innovators in return for
milestone payments and settling patent lawsuits with innovators to ensure a more stable and
balanced.
Budget Measure
• Increase in allocation to the health sector by 15% over 2007-08.
• Allocation to the National Rural Health Mission (NRHM) increased to Rs 12,050
crore.
• Provision of Rs 993 crore to the National Aids Control Programme and allocation of
Rs 1,042 crore for the eradication of polio with focus on high risk districts in Uttar
Pradesh and Bihar.
• Customs duty to be reduced from 10% to 5% on certain specified life saving drugs
and on bulk drugs used for their manufacture. These drugs are also exempted from
excise duty or countervailing duty.
• Excise duty on all goods produced in the pharmaceutical sector reduced from 16% to
8%.
• Anti-AIDS drug, ‘Atazanavir’, as well as bulk drugs for its manufacture to be
exempted from excise duty.
• In order to promote outsourcing of research, weighted deduction of 125% on any
payment made to companies engaged in R&D.
BUDGET IMPACT
• Increase in allocation to the healthcare sector is a positive given the need to ramp up
the healthcare infrastructure in the country and improve the accessibility of quality
healthcare to a larger section of the population.
• Reduction of excise duty from 16% to 8% is a positive for all pharma companies
enabling them to boost profitability going forward given that the excise duty is being
paid on MRP.
BABASAB PATIL Page 10
11. • Increased allocation of funds for eradication of HIV/AIDS and polio and reduction in
customs duty on certain life saving drugs from 10% to 5% is a positive for companies
having product pipeline catering to these segments.
• Weighted deduction of 125% on payments made for outsourcing research services is
a positive for the sector as a whole given that the emphasis on R&D has increased.
COMPANY IMPACT:
Reduction of excise duty from 16% to 8% is a positive for all pharma companies namely
domestic companies such as Cipla, Ranbaxy and the likes and MNC pharma companies such
as GSK Pharma, Pfizer and Aventis.
Emphasis on allocating funds for the eradication of HIV/AIDS and polio is a positive for
Cipla (which has a strong presence in the manufacture of anti-AIDS drugs) and Panacea
Biotec (which largely manufactures oral polio vaccines).
Weighted deduction of 125% on payments made for outsourcing research services is a
positive for R&D focused companies such as Ranbaxy and Nicholas Piramal.
BABASAB PATIL Page 11
12. Introduction to Ranbaxy:
Ranbaxy Laboratories is quite the rainmaker in India's pharmaceutical business. The
company is India's largest drug developer and manufacturer, with generics topping its list of
products. Anti-infectives CoAmoxyclav, Amoxycillin, Cephalexin, Ciprofloxacin, and
Simvastatin are in Ranbaxy's top selling class of medications; all come in several
administration forms. Other specific developmental focuses include metabolic, inflammatory,
and respiratory illnesses. Ranbaxy addresses gastrointestinal, cardiovascular, and central
nervous system disorders, as well as diabetes, pain, allergies, and HIV/AIDS. The company
also has a groundbreaking anti-malarial candidate in late-phase trials.
History
Ranbaxy Laboratories Ltd. is the largest pharmaceutical company in India, and one of the
world's top 100 pharmaceutical companies. Long a specialist in the preparation of generic
drugs, Ranbaxy is also one of the world's top 10 in that pharmaceutical category as well. Yet,
with India's agreement to apply international patent law at the beginning of 2005, Ranbaxy
has begun converting itself into a full-fledged research-based pharmaceutical company. A
major part of this effort has been the establishment of the company's own research and
development center, which has enabled the company to begin to enter the new chemical
entities (NCE) and novel drug delivery systems (NDDS) markets. In the mid-2000s, the
company had a number of NCEs in progress, and had already launched its first NDDS
product, a single daily dosage formulation of ciprofloxacin. Ranbaxy is a truly global
operation, producing its pharmaceutical preparations in manufacturing facilities in seven
countries, supported by sales and marketing subsidiaries in 44 countries, reaching more than
BABASAB PATIL Page 12
13. 100 countries throughout the world. The United States, which alone accounts for nearly half
of all pharmaceutical sales in the world, is the company's largest international market,
representing more than 40 percent of group sales. In Europe, the company's purchase of RPG
(Aventis) S.A. makes it the largest generics producer in that market. The company is also a
leading generics producer in the United Kingdom and Germany and elsewhere in Europe.
European sales added 16 percent to the company's sales in 2004. Ranbaxy's other major
markets include Brazil, Russia, and China, as well as India, which together added 26 percent
to the group's sales. Ranbaxy posted revenues of $1.18 billion in 2004. The company, which
remains controlled and led by the founding Singh family, is listed on the National Stock
Exchange of India in Mumbai.
Ranbaxy Laboratories had its origins in the early 1960s when Ranjit Singh and Gurbux
Singh, two employees of a Japanese pharmaceutical company operating in India, formed
their own pharmaceutical preparations company in Amritsar, in Punjab state. The two
merged their names to form the name for their company, Ranbaxy.
Through the 1960s, India's pharmaceutical market remained dominated by foreign drug
makers. The domestic pharmaceutical manufacturing industry was limited in large part to the
dosage preparation, packaging, and distribution of existing formulations. Like many Indian
drug companies of this period, Ranbaxy linked up with a European pharmaceutical company,
and began production in 1962.
Ranbaxy's owners sought additional financing and turned to a local moneylender, Bhai
Mohan Singh. By 1966, the pair had built up debts to Singh of more than the equivalent of
$100,000. When Singh, a native of Pakistan who had arrived in India at the beginning of that
decade, came to collect, the Ranbaxy partners offered to turn over their company to him
instead.
Singh agreed to the deal and launched the Ranbaxy family on the path toward building one of
India's largest business empires. Under Bhai Mohan Singh, Ranbaxy initially maintained its
course of preparing and packing existing branded pharmaceutical products for the Indian
market. The entry of Singh's eldest son, Parvinder, into the company in 1967, however, set
the company on a new course to become a fully independent pharmaceutical company.
BABASAB PATIL Page 13
14. Parvinder Singh had just graduated with a PhD in chemistry from the University of
Michigan. The younger Singh's background in chemistry complemented his father's business
flair. Yet Parvinder Singh himself quickly displayed a talent for business and was credited, in
large part, with guiding the company into the ranks of the global pharmaceutical leaders.
Ranbaxy's good fortune came in 1970, when the Indian government passed legislation that
effectively ended patent protection in the pharmaceutical industry. Indian pharmaceutical
manufacturers were now able to produce low-cost, generic versions of popular, yet expensive
drugs, revolutionizing the drug industry in India and in much of the world. The Singhs
quickly took advantage of India's large, highly trained, yet inexpensive workforce, building
up a strong staff of chemists and chemical engineers.
The company struck pay dirt early on, when it launched Calmpose, a generic formulation of
the hugely popular Roche discovery, Valium. Released in 1969, Calmpose immediately
placed Ranbaxy on India's pharmaceutical map. The company expanded quickly, and by
1973, Ranbaxy opened a new factory, in Mohali, for the production of active principal
ingredients (APIs). This facility enabled the company to expand its range of generic
medications and ingredients. To finance its growth, the company listed on the Indian Stock
Exchange that year.
Ranbaxy's ability to produce generic medications at far lower cost than its branded
competitors placed the company in a strong position for international expansion, especially in
less developed markets. The company began its internationalization early on, launching a
joint venture in Nigeria. That operation opened a production facility in Lagos in 1977.
Ranbaxy expanded its production at home as well, opening a new state-of-the-art dosage
plant in Dewas in 1983. In 1987, the company became India's leading antibiotic and
antibacterial producer when it completed a new API plant in Toansa, in Punjab, that year.
The Toansa facility backed up Ranbaxy's plans to enter the U.S. market, and in 1988, the
Toansa plant received Food and Drug Administration (FDA) approval.
Ranbaxy formulated a new strategy, that of becoming a full-fledged pharmaceutical
company. The driving force behind the company's new direction was Parvinder Singh, who
BABASAB PATIL Page 14
15. was named the company's managing director in 1982. Nonetheless, Bhai Mohan Singh
remained in control of the company.
As part of its new strategy, Ranbaxy launched its own research and development center in
1985. The company also stepped up its marketing efforts, launching a new dedicated
marketing subsidiary, Stancare, that year. By 1990, the company had a new product to sell,
when Ranbaxy was granted a U.S. patent for its doxycycline antibiotic preparation. The
following year, the company was granted a U.S. patent for its cephalosporin preparations,
and the company built a new state-of-the-art facility for their production in Mohali.
A major milestone for the company came in 1992, when it reached a marketing agreement
with Eli Lilly & Co. The companies set up a joint venture in India to produce and market
Lilly's branded pharmaceuticals for the domestic market. At the same time, Lilly agreed to
begin marketing Ranbaxy's generic medications in the United States. In this way, Ranbaxy
gained widescale access, backed by the highly respected Lilly, into the world's single largest
drugs market.
Parvinder Singh took over as head of the company--ousting his father in what was described
as a family feud--in 1992. By then, Ranbaxy had grown into one of India's largest
pharmaceutical companies on the basis of its generics production. Yet as pressure grew on
India to begin enforcing international drug patents, the company itself appeared to have
reached a crossroads--whether to remain focused on copying generic molecules, or to begin
developing new drugs in-house. The company chose the latter, and in 1993 adopted a new
corporate mission to announce its reformulated ambitions: "To become a research-based
international company."
Ranbaxy made good on its mission--by the middle of the next decade, nearly 80 percent of its
sales came from outside of India. As a first step, the company launched a new joint venture,
in China, backing its entry into that market with a production facility in Guangzhou. The
following year, the company established subsidiaries in London, England, and in Raleigh,
North Carolina. In 1995, the company stepped up its U.S. presence with the purchase of Ohm
Laboratories Inc., which gave the company its first manufacturing plant in that market.
BABASAB PATIL Page 15
16. Ranbaxy then launched construction of a new and state-of-the-art manufacturing wing,
which, completed that year, gained FDA approval.
This new facility enabled Ranbaxy to step up its presence in the United States, and in 1998
the company began marketing its generic products under its own brand name. That year, in
addition, the company filed an application to begin Phase I clinical testing on its first in-
house developed NCE. The following year, the company's NDDS efforts paid off as well,
when Bayer acquired the rights to market Ranbaxy's single daily-dosage ciprofloxacin
formulation.
Ranbaxy's international expansion continued as well, with the launch of marketing operations
in Brazil. As the largest pharmaceuticals market in Latin America, that country was the
cornerstone of the company's plans to expand throughout the region. Ranbaxy also expanded
in Europe, with the agreement in 2000 to acquire Bayer's Germany-based generics business,
Basics. The company also added production plants in Malaysia and Thailand.
Parvinder Singh died in 1999 and longtime righthand man D.S. Brar took over as company
leader, naming family outsider Brian Tempest as company president. The new management
team continued Singh's expansion strategy, opening a new manufacturing plant in Vietnam in
2001.
Ranbaxy also sought new alliances, and in 2003 the company reached a global drug
discovery and development partnership with GlaxoSmithKline. That agreement called for
Glaxo to handle the later-stage development process for Ranbaxy created molecules. The
company's international expansion also took a major step forward at the end of 2002, when it
agreed to acquire RPG (Aventis) in France, that country's leading generic drugs producer.
Ranbaxy's sales had by then topped the $1 billion mark, placing the company not only as the
leader in India's pharmaceuticals industry, but also among the ranks of the world's top 100
pharmaceuticals companies. Ranbaxy also boasted a place among the world's top ten generic
drugs producers. In addition, the company had advanced a growing number of its own NCE
and NDDS molecules into clinical testing. The company's transition into research-based
product development was seen as crucial as India announced its intention to enforce
international drug patents at the beginning of 2005.
BABASAB PATIL Page 16
17. Ranbaxy appeared prepared to meet this challenge, however, and confidently set its sights on
boosting its annual sales past $2 billion by 2007 and to more than $5 billion by the beginning
of the next decade. International growth remained an essential part of that strategy. The
company began negotiations for a major acquisition in Germany at the end of 2004, which
was expected to be completed in 2005. The company also launched construction of a new
$100 million production facility in Brazil. Meanwhile, Ranbaxy continued to increase its
research and development budget, with the goal of generating as much as 40 percent of its
revenues from its in-house innovations by the 2010s. Ranbaxy expected to remain India's
drug leader into the new century.
Principal Subsidiaries
Basics GmbH (Germany); Gufic Pharma Ltd. (98%); Ohm Laboratories Inc. (United States);
Ranbaxy (Hong Kong) Ltd.; Ranbaxy (Malaysia) Sdn. Bhd. (56.25%); Ranbaxy
(Netherlands) B.V.; Ranbaxy (S.A.) Proprietary Ltd.; Ranbaxy (UK) Ltd.; Ranbaxy Do
Brasil Ltda.; Ranbaxy Drugs and Chemicals Company; Ranbaxy Drugs Ltd.; Ranbaxy Egypt
Ltd.; Ranbaxy Europe Ltd. (United Kingdom); Ranbaxy Farmaceutica Ltda. (Brazil; 70%);
Ranbaxy Fine Chemicals Ltd.; Ranbaxy France SAS; Ranbaxy Ireland Ltd.; Ranbaxy Nigeria
Ltd. (84.89%); Ranbaxy Panama, S.A.; Ranbaxy Pharmaceuticals Inc. (United States);
Ranbaxy Poland Sp. z.o.o.; Ranbaxy PRP (Peru) S.A.C.; Ranbaxy Unichem Company Ltd.
(Thailand; 88.56%); Ranbaxy USA, Inc.; Ranbaxy Vietnam Company Ltd.; Ranbaxy
(Guangzhou China; 83%); Ranbaxy, Inc. (United States); Ranchem Inc. (United States);
Ranlab Inc. (United States); RanPharm Inc. (United States); Rexcel Pharmaceuticals Ltd.;
Solus Pharmaceuticals Ltd.; Unichem Distributors (Thailand; 99.96%); Vidyut Investments
Ltd.; Vidyut Travel Services Ltd.
Principal Competitors
BABASAB PATIL Page 17
18. RPG Enterprises; GlaxoSmithKline Consumer Healthcare Ltd.; East India Pharmaceutical
Works Ltd.; Dr. Reddy's Laboratories Ltd.; Cipla Ltd.; Concept Pharmaceuticals Ltd.;
Khandelwal Laboratories Ltd.; Dabur India Ltd.
BABASAB PATIL Page 18
19. 1) Current Ratios = Current assets
Current liabilities
Year 2002 2003 2004 2005 2006
Ratios 3.60% 4.16% 2.77% 3.11% 3.46%
BABASAB PATIL Page 19
20. 4.50%
4.00%
3.50%
Interpretation:-
3.00% The current ratio of the
2.50%
Ratios firm measures the short
2.00%
1.50% term solvency ,that is its
1.00% ability to meet the short
0.50%
0.00% term obligations. In the
following graph we can
say that the firm’s current ratio is increasing in first two years and has decreased in third year
and again increase in the subsequent years . This shows that the firm has the ability to meet
its current obligations.
This also means that the company is blocking up the assets and are not been utilized in the
other investments.
2) Quick ratios= Quick assets
Current liabilities
Year 2002 2003 2004 2005 2006
BABASAB PATIL Page 20
21. Ratios 1.64 0.99 0.98 1.26 1,49
1.8
1.6
1.4
1.2
1
Ratios
0.8
0.6
0.4
0.2
0
Interpretation:-
Quick ratios are used to measure the firm’s ability to service its short term liabilities .from
the following graph we can say that the firm has high liability servicing capacity in the first
year ,.but it has decreased in next two years. And thereby increased in the subsequent years.
This shows that the company has the ability to meet its liabilities.
3) Inventory turnover ratio = cost of goods sold
Average inventory
Year 2002 2003 2004 2005 2006
Ratios 4.03 3.84 3.67 3.60 3.73
BABASAB PATIL Page 21
22. 4.1
4
3.9
3.8
3.7 Ratios
3.6
3.5
3.4
3.3
Interpretation:-
This means that the inventory in the first year is been sold very fast. And there is an decrease
in the movement of the inventories but it slightly increased in the last year. This may be a
good sign to the company that it may still increase the inventory movement in the next
subsequent years.
4) Gross profit Margin = gross profit
Sales
Year 2002 2003 2004 2005 2006
Ratios 25.28% 28.41% 19.95% 8.99% 14.98%
BABASAB PATIL Page 22
23. 30.00%
25.00%
20.00%
15.00% Ratios
10.00%
5.00%
0.00%
Interpretation:-
The gross profit measures the relation between the sales and profits .As there was increase in
the gross profits from 2002 to 2003 it was a good sign to the company ,but it decreased in
the subsequent years and again increased in the last year .it was not much good as compared
to the previous years.
5) Net profit margin = profit after tax
Sales
Year 2002 2003 2004 2005 2006
Ratios 11.30 22.49 14.62 6.32 9.37
BABASAB PATIL Page 23
24. 25
20
15
Ratios
10
5
0
Interpretation:-
The net profit margin is the indicative of the managements ability to operate the business
with sufficient success. In the following graph we can see that the net profit increased from
2002 to 2003 .it was normal in 2004 .But at the subsequent years the net profit decreased .
This is a good sign to the company as it can earn more return on investments if it has high
rate inventory turn over.
6) Operating profit ratio = EBIT
Sales
Year 2002 2003 2004 2005 2006
Ratios 24.68% 27.66% 17.38% 5.69% 10.91%
BABASAB PATIL Page 24
25. 30.00%
25.00%
20.00%
15.00% Ratios
10.00%
5.00%
0.00%
Interpretation:-
7) Cost of goods sold ratio = cost of goods sold *100
Net sales
Year 2002 2003 2004 2005 2006
Ratios
79.99% 74.43% 82.71% 92.22% 81.83%
BABASAB PATIL Page 25
26. 100.00%
80.00%
60.00%
Ratios
40.00%
20.00%
0.00%
Interpretation:-
The cost of goods sold ratio shows what percentage share of sales is consumed by cost of
goods sold , and what proportion is available for meeting expenses .In the following figure
we can se that the cost of goods sold ratio is continuously increasing .
8) Return on Assets = PAT+ Interest *100
Average fixed assets
Year 2002 2003 2004 2005 2006
Ratios 72.64% 96.08% 68.10% 24.07% 33.33%
BABASAB PATIL Page 26
27. 100.00%
80.00%
60.00%
Ratios
40.00%
20.00%
0.00%
Interpretation:-
The ROA measures the profitability of the total funds .here in the following figure we can
say that percentage of return on assets is gradually decreasing year after year.
9) Return on capital employed = Profit after tax *100
Average total capital employed
Year 2002 2003 2004 2005 2006
Ratios 34.58% 37.55% 21.15% 7.39% 8.51%
BABASAB PATIL Page 27
28. 40.00%
35.00%
30.00%
25.00%
20.00% Ratios
15.00%
10.00%
5.00%
0.00%
Interpretation:-
The ROCE is similar to the ROA .Here the profits are related to the total capital employed.
Higher the ratio, more efficient is the use of capital employed .But in the following graph
we can say that the ratio is gradually decreasing ,this means that the firm is not utilizing the
capital efficiently
10) EPS = Net profit available to the equity shareholders *100
Number of ordinary shares outstanding
Year 2002 2003 2004 2005 2006
Ratios 3.43% 0.54% 4.77% 1.18% 1.21%
BABASAB PATIL Page 28
29. 5.00%
4.00%
3.00%
Ratios
2.00%
1.00%
0.00%
Interpretation:-
The EPS indicates the earnings of a share .by the following graph it is clear that the EPS is
Totally decreased from 2002 to 2003 .But there was a drastic rise in the EPS in 2004 ,and
again there was decrease in the subsequent years.
11) D/E Ratio = Total debt
Shareholders equity
Year 2002 2003 2004 2005 2006
Ratios 43.33% 48.97% 59.73% 91.37% 188.35%
BABASAB PATIL Page 29
30. 200.00%
150.00%
100.00% Ratios
50.00%
0.00%
Interpretation:-
The debt equity ratio is the relationship between the borrowed funds and the owner’s
capital. Here in the following graph it is clear that the debt equity ratio is increasing .it means
that the creditors are putting less money of their own and hence it is a danger sign to the
company.
12) Interest coverage = EBIT
Interest
Year 2002 2003 2004 2005 2006
Ratios 35.13% 24.25% 65.67% 12.03% 10.40%
BABASAB PATIL Page 30
31. 70.00%
60.00%
50.00%
40.00%
Ratios
30.00%
20.00%
10.00%
0.00%
Interpretation:-
This ratio measures the debt servicing capacity of the firm .from the following graph ,the
interest coverage ratio in more in the year 2002 but since then it went on gradually
decreasing. This could be a danger sign for the firm that it is using excessive debt and does
not have the capacity to assure payment of the interest to the creditors .
13) Dividend coverage = EAT
Preference dividend
Year 2002 2003 2004 2005 2006
Ratios 3.58% 2.85% 1.67% 0.70% 1.20%
BABASAB PATIL Page 31
32. 4.00%
3.50%
3.00%
2.50%
2.00% Ratios
1.50%
1.00%
0.50%
0.00%
Interpretation:-
This ratio measures the dividend payment ability of the firm which carry a stated rate of
return to the shareholders.Higher the ratio better will be to the shareholders . but here the
dividend payment ability is decreasing gradually year after year.
14) Dividend payout ratio = Dividend paid *100
EPS
Year 2002 2003 2004 2005 2006
Ratios 5.06% 5.15% 6.62% 2.68% 2.61%
BABASAB PATIL Page 32
33. 7.00%
6.00%
5.00%
4.00%
Ratios
3.00%
2.00%
1.00%
0.00%
Interpretation:-
This states the firms ability to pay the dividends to the shareholders.Even here the payment
ratio is decreasing . The firm here.is not able to pay the dividends .the payout ratio is
decreasing gradually every year.
15) Total assets turnover ratio = cost of goods sold *100
Average total assets
Year 2002 2003 2004 2005 2006
Ratios 2.18% 2.62% 2.96% 2.86% 2.73%
BABASAB PATIL Page 33
34. 3.00%
2.50%
2.00%
1.50% Ratios
1.00%
0.50%
0.00%
Interpretation:-
The assets turnover ratio measures the efficiency of the firm in in managing and utilizing
the assets. Higher the turnover more efficient is the management. So from this graph we can
say that the firm is more efficient in managing its assets as the ratio is increasing every year.
16) Fixed assets turnover ratio = cost of goods sold *100
Average fixed assets
Year 2002 2003 2004 2005 2006
Ratios 2.14% 3.25% 2.25% 2.01% 1.75%
BABASAB PATIL Page 34
35. 3.50%
3.00%
2.50%
2.00%
Ratios
1.50%
1.00%
0.50%
0.00%
Interpretation:-
As the figure shows, there is decrease in the ratio of assets turn over .Hence the firm is not
efficient in managing and utilizing the fixed assets.
17) Current assets turnover = cost of goods sold *100
Average current assets
Year 2002 2003 2004 2005 2006
Ratios 1.59% 2.38% 1.77% 1.72% 1.70%
BABASAB PATIL Page 35
36. 2.50%
2.00%
1.50%
Ratios
1.00%
0.50%
0.00%
Interpretation:-
The current assets turnover ratio measures that how quickly the short term obligations can be
met. High the ratio ,more efficient is the firm’s ability to meet the short term obligations. In
the following graph it is shown that there is increase in the current assets turnover ratio.
18) Capital turnover ratio = cost of goods sold
Average capital employed
Year 2002 2003 2004 2005 2006
Ratios 0.79% 1.80% 1.25% 1.16% 0.92%
BABASAB PATIL Page 36
37. 1.80%
1.60%
1.40%
1.20%
1.00%
Ratios
0.80%
0.60%
0.40%
0.20%
0.00%
Interpretation:-
This ratio measures the relationship between cost of goods sold and average capital
employed. And how fast is the utilization of the capital. this also measures what is the cost
of goods sold..From the graph we can say that there is decrease in the ratios ,so it is not a
good sign to the company. It can still perform better .
19) Debtors turnover ratio = Total sales
Drs +B/R
Year 2002 2003 2004 2005 2006
Ratios 3.83% 7.03% 4.45% 4.22% 3.91%
BABASAB PATIL Page 37
38. 8.00%
7.00%
6.00%
5.00%
4.00% Ratios
3.00%
2.00%
1.00%
0.00%
Interpretation:-
The debtors turnover ratio measures the relation between the total sales and debtors.
It means that the debtors are expected to pay within the prescribed period . high the ratio
,more efficient is the firm in collecting the debt from the debtors. Here in the following graph
we can see that the ratio is high in 2003 and gradually decreased in the subsequent years .
this is not good on the part of the company.
20) Retention ratio = Retained earnings
PAT
Year 2002 2003 2004 2005 2006
Ratios 72.12% 64.99% 40.24% 41.45% 16.76%
BABASAB PATIL Page 38
39. 80.00%
70.00%
60.00%
50.00%
40.00% Ratios
30.00%
20.00%
10.00%
0.00%
Interpretation:-
Retention ratio measures the percentage of earnings retained by the company. High the ratio,
more efficient is the company is retained earnings. So from the following graph it is clear
that the retained earnings is decreased from 2002 to 2006 gradually . Hence the company is
said to be distributing the dividends without retaining any reserves. It is advantageous from
the point of view of shareholders.
21) Return on equity = PAT *100
Shareholders fund
Year 2002 2003 2004 2005 2006
Ratios 36.98% 34.26% 21.08% 9.41% 16.19%
BABASAB PATIL Page 39
40. 40.00%
35.00%
30.00%
25.00%
20.00% Ratios
15.00%
10.00%
5.00%
0.00%
Interpretation :-
The Return on equity shows how much returns is being earned .this is made from the point
of view of the shareholders .if the return on equity is more then it is said to be the most
demanded shares in the market.
But in the following graph there was decrease in the the ratio from 2002 to 2004 . But there
was slight rise in the year 2006.
22) Book Value = Net worth
No. of shares o/s
Year 2002 2003 2004 2005 2006
Ratios 1.00 1.25 1.34 0.63 0.63
BABASAB PATIL Page 40
41. 1.4
1.2
1
0.8
0.6
0.4
0.2
0
Interpretation:-
The Book value is too high in the year 2004.It has increased from 2002 to 2006.But there
was decrease in the year 2005 and 2006.Both the years have a constant ratio.
23) PE Ratio( Prospective) = Market price
EPS
Year 2002 2003 2004 2005 2006
Ratios 25.56% 115.48% 19.70% 85.49% 35.73%
BABASAB PATIL Page 41
42. 120.00%
100.00%
80.00%
60.00% Ratios
40.00%
20.00%
0.00%
Interpretation:-
The P/E Ratio (Prospective) was high in the year 2003 . and in the year 2004 there was a
drastic change to 19.70% . It increased in the 2005 and again decreased in 2006 .this is only
because of the changes in the market price every year.
24) PE Ratio (Retrospective) = Market price
Book value
Year 2002 2003 2004 2005 2006
Ratios 86.9% 49.88% 70.13% 160% 68.62%
BABASAB PATIL Page 42
43. 160.00%
140.00%
120.00%
100.00%
80.00% Ratios
60.00%
40.00%
20.00%
0.00%
Interpretation:-
The P/E Ratio (retrospective) is very high in the year 2005. It decreased from year 2002 to
2003 and again increased from 2004 to 2005 and it decreased in 2006.
CAGR (sales) = ( Sales in 2002 )^1/4 *100
Sales in 2006
= 2894.3 ^0.25 *100
BABASAB PATIL Page 43
44. 49587.1
= 1.84 0r 184%
CAGR (EPS) = (EPS in 2002) ^1/4*100
EPS in 2006
= (3.41)^0.25*100
1.41
= 0.2956 or 29.56%
Volatility of ROE = Range of ROE over a period 2005 to 2002
Average of ROE over a period
= 36.98 – 9.41
23.58
= 1.16
Decompose ROE = PBIT * SALES * PBT * PAT * ASSETS
SALES ASSETS PBIT PBT NETWORTH
= 2013.6 * 35366.5 * 2013.6 * 2237.0 * 11230.96
35366.5 11230.96 2013.6 2013.6 23770.19
BABASAB PATIL Page 44
45. = 0.0569 * 3.143 * 1* 1.11 * 0.42
= 0.0731 OR 7.31%
Average Retention ratio = Retention ratio in last 3 years
3
= 0.40 + 0.41 + 0.16
3
= 0.3233
Average payout = 1 – 0.3233
= 0.6766
Expected growth rate of Dividend = Average retention ratio * Average return on equity
In last 3 years in last 3 years
= 0.40 + 0.41 + 0.16 * 21.08 +9.41 + 16.19
3 3
= 0.3233 * 15.56
BABASAB PATIL Page 45
46. = 5.03%
PE Ratio as per Constant Dividend Model =
Average payout ratio
Average retention ratio – Expected Growth Rate of Dividend
= 0.6766
0.466 – 0.0503
= 0.6766
0.4157
= 1.62
Value Anchor = Expected EPS * PE Ratio
* 1.62
BABASAB PATIL Page 46
47. Introduction to Cipla:-
The company was founded in 1935 by Khwaja Abdul Hamied, and its chairman today is
Yusuf Hamied (b. 1936), the founder's eldest son. Cipla, originally founded as The Chemical,
Industrial & Pharmaceutical Laboratories is a prominent Indian pharmaceutical company,
best-known outside its home country for producing low-cost anti-AIDS drugs for HIV-
positive patients in developing countries. Cipla makes drugs to treat cardiovascular disease,
arthritis, diabetes, weight control, depression and many other health conditions, and its
[1]
products are distributed in more than 180 countries worldwide. Among the hundreds of
generic medications it produces for international distribution are atorvastatin, amlopidine,
fluoxetine, venlafaxine hydrochloride and metformin.
Today (2007), Cipla is the world's largest manufacturer of antiretroviral drugs (ARVs) to
fight HIV/AIDS, as measured by units produced and distributed (multinational brand-name
drugs are much more expensive, so in money terms Cipla medicines are probably somewhere
down the list). Roughly 40% of HIV/AIDS patients undergoing antiretroviral therapy
worldwide take Cipla drugs. Ranked third in Generic market share statistics in South African
Private Sector.
BABASAB PATIL Page 47
48. Because Indian law from 1972 has allowed no (end-product) patents on drugs, and provided
for compulsory licensing, Cipla was able to manufacture medicines which enjoy patent
monopoly in certain other countries (particularly those where large, multinational
pharmaceutical companies are based). By doing so, as well as by making
an executive decision not to make profits on AIDS medication, Cipla reduced the cost of
providing antiretrovirals to AIDS patients from $12,000 and beyond (monopoly prices
charged by international pharma conglomerates) down to around $300 per year. Today they
are able to do so for under $150 per patient per year. While this sum remains out of reach for
many millions of people in Third World countries, government and charitable sources often
are in a position to make up the difference for destitute patients.
The customary treatment of AIDS consists of a cocktail of three drugs. Cipla produces an all-
in-one pill called Triomune which contains all three substances (Lamivudine, stavudine and
Nevirapine), something difficult elsewhere because the three patents are held by different
companies. One more popular fixed dose combination is there, with the name Duovir-N. This
contains Lamivudine, Zidovudine and Nevirapine
BABASAB PATIL Page 48
49. 1) Current Ratios = Current assets
Current liabilities
Year 2002 2003 2004 2005 2006
Ratios 1.60% 1.49% 2.87% 2.75% 2.97%
BABASAB PATIL Page 49
50. 3.00%
2.50%
2.00%
1.50% Ratios
1.00%
0.50%
0.00%
Interpretation:-
The current ratio of the firm measures the short term solvency ,that is its ability to meet the
short term obligations. In the following graph we can say that the firm’s current is
increasing in first year and has increased in third year and again increase in the subsequent
years . This shows that the firm has the ability to meet its current obligations.
This shows increase from 2004 to 2006 susequently.
This also means that the company is blocking up the assets and are not been utilized in the
other investments.
2) Quick ratios= Quick assets
Current liabilities
BABASAB PATIL Page 50
51. Year 2002 2003 2004 2005 2006
Ratios 0.61% 0.60% 1.34% 1.21% 1.44%
1.60%
1.40%
1.20%
1.00%
0.80% Ratios
0.60%
0.40%
0.20%
0.00%
Interpretation:-
Quick ratios are used to measure the firm’s ability to service its short term liabilities .from
the following graph we can say that the firm has low liability servicing capacity in the first
year ,.but it has increased in next two years. And thereby increased in the subsequent years.
This shows that the company has the ability to meet its liabilities.
3) Inventory turnover ratio = cost of goods sold
Average inventory
Year 2002 2003 2004 2005 2006
Ratio 0.30% 0.21% 0.22% 0.21% 0.20%
BABASAB PATIL Page 51
52. 0.30%
0.25%
0.20%
0.15% Ratio
0.10%
0.05%
0.00%
Interpretation:-
This means that the inventory in the first year is been sold very fast. And there is an decrease
in the movement of the inventories. This may be a bad sign to the company inventory
movement in the next subsequent years is very low.
4) Gross profit Margin = gross profit
Sales
Year 2002 2003 2004 2005 2006
Ratios 29.43% 34.13% 38.09% 44.00% 44.92%
BABASAB PATIL Page 52
53. 45.00%
40.00%
35.00%
30.00%
25.00%
Ratios
20.00%
15.00%
10.00%
5.00%
0.00%
Interpretation:-
The gross profit measures the relation between the sales and profits .As there was increase in
the gross profits from 2002 to 2006 it was a good sign to the company because there is
subsequent increase in the gross profit
Margin.
5) Net profit margin = profit after sales
Sales
Year 2002 2003 2004 2005 2006
Ratios 16.45% 15.49% 14.66% 16.49% 18.77%
BABASAB PATIL Page 53
54. 20.00%
15.00%
10.00%
5.00%
0.00%
Intepretation:-
The net profit margin is the indicative of the managements ability to operate the business
with sufficient success. In the following graph we can see that the net profit increased from
2002 to 2006 .it was normal in 2004.But at the subsequent years the net profit increased .
This is a good sign to the company as it can earn more return on investments as it has high
rate inventory turn over.
6) Operating profit ratio = EBIT
Sales
Year 2002 2003 2004 2005 2006
Ratios 21.65% 19.54% 19.32% 20.72% 21.93%
BABASAB PATIL Page 54
55. 22.00%
21.50%
21.00%
20.50%
20.00% Ratios
19.50%
19.00%
18.50%
18.00%
Interpretation:-
The operating profit ratio shows the relation between EBIT and Sales .Here from the
following graph we can say that the operating ratio is increased from 2002 to 2006
subsequently.this is a good sign to the company as it has increase its operating profit ratio
which is before tax.
7) Cost of goods sold ratio = cost of goods sold *100
Net sales
Year 2002 2003 2004 2005 2006
Ratios 7.9% 7.3% 7.0% 6.3% 6.1%
BABASAB PATIL Page 55
56. 8.00%
7.00%
6.00%
5.00%
4.00% Ratios
3.00%
2.00%
1.00%
0.00%
Interpretation:-
The cost of goods sold ratio shows what percentage share of sales is consumed by cost of
goods sold , and what proportion is available for meeting expenses .In the following figure
we can see that the cost of goods sold ratio is continuously decreasing . So this is a good
sign to the company as there is low cost incurred for sales.
8) Return on Assets = PAT+ Interest *100
Average fixed assets
Year 2002 2003 2004 2005 2006
Ratios 106% 88.22% 69.00% 64.86% 68.95%
BABASAB PATIL Page 56
57. 120%
100%
80%
60% Ratios
40%
20%
0%
Interpretation:-
The ROA measures the profitability of the total funds .here in the following figure we can
say that percentage of return on assets is gradually decreasing year after year.
9) Return on capital employed = Profit after tax *100
Average total capital employed
Year 2002 2003 2004 2005 2006
Ratios 25.44% 23.72% 23.23% 25.41% 28.92%
BABASAB PATIL Page 57
58. 30.00%
25.00%
20.00%
15.00% Ratios
10.00%
5.00%
0.00%
Interpretation:-
The ROCE is similar to the ROA .Here the profits are related to the total capital employed.
Higher the ratio, more efficient is the use of capital employed .But in the following graph
we can say that the ratio is gradually increasing ,this means that the firm utilizing the capital
efficiently
10) EPS = Net profit available to the equity shareholders *100
Number of ordinary shares outstanding
Year 2002 2003 2004 2005 2006
Ratios 3.9 4.1 5.09 13.6 20.19
BABASAB PATIL Page 58
59. 25
20
15
Ratios
10
5
0
Interpretation:-
The EPS indicates the earnings of a share .by the following graph it is clear that the EPS is
Totally increased from 2002 to 2006 .But there was a drastic rise in the EPS in 2006 and .
this shows that the shareholders earn better dividends
11) D/E Ratio = Total debt
Shareholders equity
Year 2002 2003 2004 2005 2006
Ratios 54.10% 64.60% 70.42% 62.66% 70.34%
BABASAB PATIL Page 59
60. 80.00%
70.00%
60.00%
50.00%
40.00% Ratios
30.00%
20.00%
10.00%
0.00%
Interpretation:-
The debt equity ratio is the relationship between the borrowed funds and the owner’s capital.
Here in the following graph it is clear that the debt equity ratio is increasing .it means that the
creditors are putting less money of their own and hence it is a danger sign to the company.
12) Interest coverage = EBIT
Interest
Year 2002 2003 2004 2005 2006
Ratios 14.73% 18.20% 38.87% 67.41% 62.15%
BABASAB PATIL Page 60
61. 70.00%
60.00%
50.00%
40.00%
Ratios
30.00%
20.00%
10.00%
0.00%
Interpretation:-
This ratio measures the debt servicing capacity of the firm .from the following graph ,the
interest coverage ratio in more in the year 2002 but since then it went on gradually
increasing. This could be a good sign for the firm that it is not using excessive debt and have
the capacity to assure payment of the interest to the creditors .
13) Dividend coverage = EAT
Preference dividend
Year 2002 2003 2004 2005 2006
Ratios 11.46% 7.44% 6.73% 5.72% 6.76%
BABASAB PATIL Page 61
62. 12.00%
10.00%
8.00%
6.00% Ratios
4.00%
2.00%
0.00%
Interpretation:-
This ratio measures the dividend payment ability of the firm which carry a stated rate of
return to the shareholders.Higher the ratio better will be to the shareholders . but here the
dividend payment ability is decreasing gradually year after year.
14) Dividend payout ratio = Dividend paid *100
EPS
Year 2002 2003 2004 2005 2006
Ratios 6.92% 10.19% 11.76% 66.07% 51.96%
BABASAB PATIL Page 62
63. 70.00%
60.00%
50.00%
40.00%
Ratios
30.00%
20.00%
10.00%
0.00%
Interpretation:-
This states the firms ability to pay the dividends to the shareholders.Here the payment ratio is
increasing . The firm here is able to pay the dividends .The payout ratio is increasing
gradually every year.
15) Total assets turnover ratio = cost of goods sold *100
Average total assets
Year 2002 2003 2004 2005 2006
Ratios 1.17% 0.96% 0.93% 0.82% 0.81%
BABASAB PATIL Page 63
64. 1.20%
1.00%
0.80%
0.60% Ratios
0.40%
0.20%
0.00%
Interpretation:-
The assets turnover ratio measures the efficiency of the firm in managing and utilizing the
assets. Higher the turnover more efficient is the management. So from this graph we can say
that the firm is not efficient in managing its assets as the ratio is decreasing every year.
16) Fixed assets turnover ratio = cost of goods sold *100
Average fixed assets
Year 2002 2003 2004 2005 2006
Ratios 0.41% 0.31% 0.28% 0.21% 0.19%
BABASAB PATIL Page 64
65. 0.45%
0.40%
0.35%
0.30%
0.25%
Ratios
0.20%
0.15%
0.10%
0.05%
0.00%
Interpretation:-
As the figure shows, there is decrease in the ratio of assets turn over .Hence the firm is not
efficient in managing and utilizing the fixed assets.
It is not a good sign to the company.
17) Current assets turnover = cost of goods sold *100
Average current assets
Year 2002 2003 2004 2005 2006
Ratios 0.12% 0.19% 0.12% 0.11% 0.11%
BABASAB PATIL Page 65
66. 0.20%
0.15%
0.10% Ratios
0.05%
0.00%
Interpretation:-
The current assets turnover ratio measures that how quickly the short term obligations can be
met. High the ratio ,more efficient is the firm’s ability to meet the short term obligations. In
the following graph it is shown that there is decrease in the current assets turnover ratio. In
the year 2002 to 2003 there increase in the ratios ,but there is a decrease in the ratios from
2004 onwards.
18) Capital turnover ratio = cost of goods sold
Average capital employed
Year 2002 2003 2004 2005 2006
Ratios 10.08% 9.80% 8.62% 8.48% 13.36%
BABASAB PATIL Page 66
67. 14.00%
12.00%
10.00%
8.00%
Ratios
6.00%
4.00%
2.00%
0.00%
Interpretation:-
This ratio measures the relationship between cost of goods sold and average capital
employed. And how fast is the utilization of the capital. this also measures what is the cost
of goods sold..From the graph we can say that there is increase in the ratios from 2002 to
2006 ,so it is a good sign to the company. It is performing perform better .
19) Debtors turnover ratio = Total sales
Debtors
Year 2002 2003 2004 2005 2006
Ratios 5.60% 4.49% 4.19% 4.22% 3.69%
BABASAB PATIL Page 67
68. 6.00%
5.00%
4.00%
3.00% Ratios
2.00%
1.00%
0.00%
Interpretation:-
The debtors turnover ratio measures the relation between the total sales and debtors.
It means that the debtors are expected to pay within the prescribed period . high the ratio
,more efficient is the firm in collecting the debt from the debtors. Here in the following graph
we can see that the ratio is high in 2002 and gradually decreased in the subsequent years .
this is not good on the part of the company.
20) Retention ratio = Retained earnings
PAT
Year 2002 2003 2004 2005 2006
Ratios 0.88% 0.83% 0.81% 0.78% 0.82%
BABASAB PATIL Page 68
69. 0.88%
0.86%
0.84%
0.82%
0.80% Ratios
0.78%
0.76%
0.74%
0.72%
Interpretation:-
The retention ratio is increased from 2002 to 2004 and decreased in the year 2005 .but there
was again rise in the ratio in 2006 .this shows that the company is stable in retaining the
earnings even after paying taxes.
21) Return on equity = PAT *100
Retained earnings
Year 2002 2003 2004 2005 2006
Ratios 21.97% 27.83% 24.26% 26.36% 30.63%
BABASAB PATIL Page 69
70. 35.00%
30.00%
25.00%
20.00%
Ratios
15.00%
10.00%
5.00%
0.00%
Interpretation:-
The Return on equity shows how much returns is being earned .this is made from the point
of view of the shareholders .if the return on equity is more then it is said to be the most
demanded shares in the market.
But in the following graph there was increase in the ratio from 2002 to 2006 .
22) Book Value = Net worth
No. of shares o/s
Year 2002 2003 2004 2005 2006
Ratios 14.79 17.84 21.07 5.16 6.5
BABASAB PATIL Page 70
71. 25
20
15
10
5
0
Interpretation:-
From the following graph it is clear that the book value of the shares is decreased from 2002
to 2005 . and there was a slight rise in the book value.it is because of the increase in the
number of shares.from 2005 onwards.
23) PE Ratio( Prospective) = Market price
EPS
Year 2002 2003 2004 2005 2006
Ratios 2.60 1.73 2.38 1.52 2.36
3
2.5
2
1.5 Ratios
1
0.5
0
BABASAB PATIL Page 71
72. Interpretation:-
The P/E Ratio (prospective) decreased from 2002 to 2003 .It increased in 2004 and again
there was decrease in 2005 .In 2006 the ratio again increased.This is because of the changes
in the market prices.
24) PE Ratio(Retrospective) = Market price
Book value
Year 2002 2003 2004 2005 2006
Ratios 68.78 40.01 55.71 49.57 100.49
120
100
80
60 Ratios
40
20
0
BABASAB PATIL Page 72
73. Interpretation:-
The P/E Ratio (prospective) decreased from 2002 to 2004 .And again there was decrease in
2005 .In 2006 the ratio again increased.This is because of the changes in the market prices.
CAGR (sales) = ( Sales in 2007 )^1/4 -1 *100
Sales in 2003)
= (3763.72) ^0.25 -1*100
1599.00
= 23.86%
CAGR (EPS) = (EPS in 2007) ^1/4-1*100
EPS in 2003)
BABASAB PATIL Page 73
74. = (12.49)^0.25-1*100
4.11
= 32.03%
Volatility of ROE = Range of ROE over a period 2007to 2003
Average of ROE over a period
= 21.97 -26.36
26.2
= -0.16
Decompose ROE = PBIT * SALES * PBT * PAT * ASSETS
SALES ASSETS PBIT PBT NETWORTH
= 5146.14 * 2482.87 * 5146.14 * 4096.24 * 1833.77
2482.87 1833.77 5146.14 5146.14 1556.63
= 0.2 * 1.35 * 1* 0.79 * 1.17
= 24.95%
BABASAB PATIL Page 74
75. Average Retention ratio = Retention ratio in last 3 years
3
= 0.81 +0.78 + 0.82
3
= 0.803
Average payout = 1 – 0.803
= 0.197
BABASAB PATIL Page 75
76. Expected growth rate of Dividend= Avg reten ratio * Avg return on eq
In last 3 years in last 3 years
= 0.81 +0.78 +0.82 * 24.26 +26.36 +30.63
3 3
= 0.803 * 27.08
= 21.74%
PE Ratio as per Constant Dividend Model =
Average payout ratio
Average retention ratio – Expected Growth Rate of Dividend
= 0.197
0.824 – 0.2174
= 0.197
0.6066
= 32.37%
Value Anchor = Expected EPS * PE Ratio
= 164.91* 32.47
= 53.54 market price
BABASAB PATIL Page 76
77. Consolidated Ratios of Ranbaxy
Year
Ratios 2002 2003 2004 2005 2006
3.60% 4.16% 2.77% 3.11% 3.46%
Current Ratios
1.64% 0.99% 0.98% 1.26% 1.49%
BABASAB PATIL Page 77
78. Quick Ratios
Inventory T.O 4.03% 3.84% 3.67% 3.60% 3.73%
Ratios
Gross profit 25.28% 28.41% 19.95% 8.99% 14.98%
margin
Net profit 11.30 22.49 14.62 6.32 9.37
margin
Operating profit
margin 24.68% 27.66% 17.38% 5.69% 10.91%
Cost of goods 79.99% 74.43% 82.71% 92.22% 81.83%
sold ratio
Return on Assets 72.64% 96.08% 68.10% 24.07% 33.33%
Return on 34.58% 37.55% 21.15% 7.39% 8.51%
capital employed
EPS 3.43% 0.54% 4.77% 1.18% 1.21%
D/E Ratio 43.33% 48.97% 59.73% 91.37% 188.35%
Interest coverage 35.13% 24.25% 65.67% 12.03% 10.40%
Ratio
Dividend 3.58% 2.85% 1.67% 0.70% 1.20%
coverage Ratio
Dividend payout 5.06% 5.15% 6.62% 2.68% 2.61%
Ratio
BABASAB PATIL Page 78
79. Total assets 2.18% 2.62% 2.96% 2.86% 2.73%
turnover Ratio
Fixed assets 2.14% 3.25% 2.25% 2.01% 1.75%
turnover Ratio
Current assets 1.59% 2.38% 1.77% 1.72% 1.70%
turnover Ratio
Capital 0.79% 1.80% 1.25% 1.16% 0.92%
turnoverRatio
Debtors
turnover Ratio 3.83% 7.03% 4.45% 4.22% 3.91%
72.12% 64.99% 40.24% 41.45% 16.76%
Retention Ratio
Return on 36.98% 34.26% 21.08% 9.41% 16.19%
Equity
Book Value 1.00 1.25 1.34 0.63 0.63
P/E Ratio
(prospective) 25.56% 115.48% 19.70% 85.49% 35.73%
BABASAB PATIL Page 79
80. Consolidated Ratios of Cipla
Year
Ratios 2002 2003 2004 2005 2006
1.60% 1.49% 2.87% 2.75% 2.97%
Current Ratios
0.61% 0.60% 1.34% 1.21% 1.44%
Quick Ratios
Inventory T.O 0.30% 0.21% 0.22% 0.21% 0.20%
Ratios
Gross profit 29.43% 34.13% 38.09% 44.00% 44.92%
margin
Net profit 16.45% 15.49% 14.66% 16.49% 18.77%
margin
Operating profit
margin 21.65% 19.54% 19.32% 20.72% 21.93%
Cost of goods 7.9% 7.3% 7.0% 6.3% 6.1%
sold ratio
Return on 106% 88.22% 69.00% 64.86% 68.95%
Assets
Return on 25.44% 23.72% 23.23% 25.41% 28.92%
capital
employed
EPS 3.9 4.1 5.09 13.6 20.19
BABASAB PATIL Page 80
81. D/E Ratio 54.10% 64.60% 70.42% 62.66% 70.34%
Interest 14.73% 18.20% 38.87% 67.41% 62.15%
coverage Ratio
Dividend 11.46% 7.44% 6.73% 5.72% 6.76%
coverage Ratio
Dividend payout 6.92% 10.19% 11.76% 66.07% 51.96%
Ratio
Total assets 1.17% 0.96% 0.93% 0.82% 0.81%
turnover Ratio
Fixed assets 0.41% 0.31% 0.28% 0.21% 0.19%
turnover Ratio
Current assets 0.12% 0.19% 0.12% 0.11% 0.11%
turnover Ratio
Capital 10.08% 9.80% 8.62% 8.48% 13.36%
turnoverRatio
Debtors
turnover Ratio 5.60% 4.49% 4.19% 4.22% 3.69%
0.88% 0.83% 0.81% 0.78% 0.82%
Retention Ratio
Return on 21.97% 27.83% 24.26% 26.36% 30.63%
Equity
Book Value 14.79 17.84 21.07 5.16 6.5
P/E Ratio
(prospective) 2.60% 1.73% 2.38% 1.52% 2.36%
BABASAB PATIL Page 81
82. P/E Ratio
(retrospective) 68.78% 40.01% 55.71% 49.57% 100.49%
Findings:-
current ratio is increasing in first two years and has decreased in third year and again
increase in the subsequent years . This shows that the firm has the ability to meet its
current obligations.
the firm has high liability servicing capacity as it has the ability to meet its
liabilities
As there was increase in the gross profits from 2002 to 2003 it was a good sign to
the company
Decrease in the net profit margin is a good sign to the company as it can earn more
return on investments if it has high rate inventory turn over.
The cost of goods sold ratio is continuously increasing in case of Ranbaxy.
Percentage of return on assets is gradually decreasing year after year.
BABASAB PATIL Page 82
83. the ROCE ratio is gradually decreasing ,this means that the firm is not utilizing the
capital efficiently
There was a drastic rise in the EPS in 2004, and again there was decrease in the
subsequent years.
The debt equity ratio is increasing .it means that the creditors are putting less money
of their own and hence it is a danger sign to the company.
The interest coverage ratio in more in the year 2002 but since then it went on
gradually decreasing. This could be a danger sign for the firm that it is using
excessive debt and does not have the capacity to assure payment of the interest to the
creditors .
The dividend payment ability is decreasing gradually year after year.
The firm here.is not able to pay the dividends .the payout ratio is decreasing
gradually every year
more efficient in managing its assets as the ratio is increasing every year.
there is decrease in the ratio of assets turn over .Hence the firm is not efficient in
managing and utilizing the fixed assets.
increase in the current assets turnover ratio where the firm can meet its current
obligations.
decrease in the capital turnover ratios ,so it is not a good sign to the company.
decreased in debtors turnover ratios the subsequent years is not good on the part of
the company.
company is said to be distributing the dividends without retaining any reserves. It is
advantageous from the point of view of shareholders.
BABASAB PATIL Page 83
84. The P/E Ratio (Prospective) was high in the year 2003 . and in the year 2004 there
was a drastic change to 19.70%
The P/E Ratio (retrospective) is very high in the year 2005.
Findings(Cipla):-
The firm’s current is increasing in first year and has increased in third year and again
increase in the subsequent years
The firm has low liability servicing capacity in the first year ,.but it has increased in
next two years. And thereby increased in the subsequent years. This shows that the
company has the ability to meet its liabilities.
there is a decrease in the movement of the inventories. This may be a bad sign to the
company inventory movement in the next subsequent years is very low.
BABASAB PATIL Page 84
85. increase in the gross profits from 2002 to 2006 is was a good sign to the company
the net profit increased from 2002 to 2006 .it was normal in 2004.But at the
subsequent years the net profit increased . This is a good sign to the company as it can
earn more return on investments as it has high rate inventory turn over
the operating ratio is increased from 2002 to 2006 subsequently.this is a good sign to
the company as it has increase its operating profit ratio which is before tax.
the cost of goods sold ratio is continuously decreasing
percentage of return on assets is gradually decreasing year after year.
The ROCE ratio is gradually increasing ,this means that the firm utilizing the capital
efficiently
EPS is Totally increased from 2002 to 2006 .But there was a drastic rise in the EPS
in 2006 and . this shows that the shareholders earn better dividends
the debt equity ratio is increasing .it means that the creditors are putting less money
of their own and hence it is a danger sign to the company.
the interest coverage ratio in more in the year 2002 but since then it went on gradually
increasing. This could be a good sign for the firm that it is not using excessive debt
and have the capacity to assure payment of the interest to the creditors .
The dividend payment ability is decreasing gradually year after year.
The firm is able to pay the dividends .The payout ratio is increasing gradually every
year.
the firm is not efficient in managing its assets as the ratio is decreasing every year.it is
not a good sign to the company.
there is decrease in the current assets turnover ratio. In the year 2002 to 2003 there
increase in the ratios ,but there is a decrease in the ratios from 2004 onwards.
BABASAB PATIL Page 85
86. there is increase in the capital turnover ratios from 2002 to 2006 ,so it is a good sign
to the company. It is performing perform better .
the debtors turnover ratio is high in 2002 and gradually decreased in the subsequent
years . this is not good on the part of the company.
The retention ratio is increased from 2002 to 2004 and decreased in the year 2005 .but
there was again rise in the ratio in 2006
But in the following graph there was increase in the return on equity ratio from 2002
to 2006 .
the book value of the shares is decreased from 2002 to 2005 . and there was a slight
rise in the book value.it is because of the increase in the number of shares.from 2005
onwards.
The P/E Ratio (prospective) decreased from 2002 to 2003 .It increased in 2004 and
again there was decrease in 2005
The P/E Ratio (prospective) decreased from 2002 to 2004 .And again there was
decrease in 2005 .In 2006 the ratio again increased.This is because of the changes in
the market prices.
Bibliography:-
BABASAB PATIL Page 86