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Interfirm comparison of Cipla and Torrent Pharmaceuticals

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Interfirm financial comparison of Cipla and Torrent Pharmaceuticals

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  • Good and helpful presenation! As far as current events are concerned, Q3 2014 results are quite disappointing - revenue and gross profit declined QoQ. Will TORRENT PHARMACEUTICALS continue it's growth path? There are different opinions about that, take a look for example at http://intwits.com/india/stock/TORNTPHARM/
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  • Nice presentation, suggest you to use some non-financial comparison such as HSE awareness, Social Responsibility etc.
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Interfirm comparison of Cipla and Torrent Pharmaceuticals

  1. 1. Inter-firm comparison of Cipla andTorrent Pharmaceuticals Presentation by: Varun Nigam Varun Balakrishnan Soumya Mukherjee Saurabh Mhase
  2. 2. Indian Pharmaceutical Market India is the 14th largest Pharma Market in the world! Valued at Rs. 600 bn 15-17% Growth Rate Dominated by Brande d Generic s
  3. 3. 0 100 200 300 400 500 600 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 Indian Pharma Market INR in billion
  4. 4. Growth Drivers Growin g Populat ion Increase in Drug Income level Increase Growing incidence of Chronic Ailments Improving Medical Infrastrutu re Increased Government spending on Healthcare Availability of new forms of Treatment
  5. 5. Swot Analysis: Cipla S W O T Support to cancer patients P. falciparum malaria ‘No Touch Breast Scan’ Foremost player in anti-infective and anti- asthmatic formulations Strong employee force Limited market share Negative Campaign of AHF Venture into Alzheimer’s disease medication Can use Viramune generic to achieve higher growth Increased investment Constant price rises in the Indian The Indian Rupee depreciated Fluctuations in
  6. 6. Swot Analysis: Torrent S W O T High market Share High Growth Rate Strong Innovation Global Presence Low Employee Strength High Debts Aquisations Product Expansion Emerging Markets Constant price rise The Indian Rupee depreciated Fluctuations in currency
  7. 7. Cipla overview • Cipla Limited is a pharmaceutical company based in Mumbai • Cipla makes drugs to treat cardiovascular disease, arthritis etc. • Market capitalization is US$ 5.6 billion (2013) • Cipla has 34 manufacturing units in 8 locations across India and has presence in 170 countries • It has over 2000 products in 65 therapeutic categories
  8. 8. History of Cipla • 1935- Founded in by Dr. K. A. Hamied • Vision:To make India self-sufficient in healthcare • 1939- Encouraged by Mahatma Gandhi by visiting the company • 1960- API manufacturing technology • 1996-World’s first transparent dry powder inhaler • 2001- HIV medicines • 2005- Anti bird-Flu drug invented within 2-3months • 2012- Reached 20000 employees level
  9. 9. Overview ofTorrent Pharma • Torrent Pharmaceuticals Ltd. is the flagship company of theTorrent Group • Initially was named asTrinity Laboratories Ltd • Operates in more than 50 countries with over 1000 product • It has 7 fully owned subsidiaries
  10. 10. History ofTorrent Pharma • 1970 – Founded by Mr. U N Mehta • 1992- President's award for highest pharmaceuticals exports of Rs. 1570 million • 1994- Almost doubled its manufacturing capacity • 2001- India's ninth best company among capital intensive companies in terms of ROCE in a study by ETIG-BCG
  11. 11. Current Market Price Rs. 423.5 Rs. 526.3 As of 23-01-2014
  12. 12. Some of the Products Cipla Drugs Purpose Cost (in Rs.) Escitalopram Anti-depressant 840 Isotroin AcneTreatment 108 Entavir Chronic Hep-B 1400 Triomune HIV/AIDS 662 Oseltamivir Swine Flu 5022 Asthalin Asthma 67 Levoflox chemotherapeutic antibiotic 46 Cefoprox anti-bacterial 91.22 Montair anti-allergic 120 Vanlid anti-bacterial 900 Tachyra Cardiac 48
  13. 13. Some of the Products Torrent Pharma Drugs Purpose Cost (in Rs.) Enselin Cardiac 85 Azukon Pregnancy,Lactation 43 Calcigard Hypertension 12.39 Domstal Acute Nausea,Vomiting 35 Symbal Diabetes 112 Dilzem Calcium Channel blockers 23.84 Hexidol schizophrenia 38 Diclomax Arthritis 15 Promotil Cardiovascular 30.25 Zaplon Insomnia 60.14 Macrotor Respiratory 72
  14. 14. Key financials of the Companies (Year-to-Year) Cipla Item Mar ‘13 Mar ‘ 12 Mar ‘11 Mar ‘10 Mar ‘09 Total Income (Rs. In crores) 8,722.30 7,114.56 6,561.49 5,915.49 5,208.33 Percentage change in income from previous year 22.6% 8.42% 10.92% 13.6% - Total expenses (Rs. In crores) 6,374.03 5,384.4 5,149.1 4,408.85 4,103.0 Net Profit (Rs. In crores) 1,507.11 1,123.96 960.39 1,081.49 776.81 Percentage change in Net Profit 34.08% 17.03% -11.2% 39.22% - Total Equity Dividend (Rs. In crores) 160.58 160.58 224.81 160.58 155.46 Shares in issue (in Lacs) 8,029.21 8,029.21 8,029.21 8,029.21 7,772.91 Earnings Per Share (Rs.) 18.77 14 11.96 13.47 9.99 Book value (Rs.) 110.47 94.04 82.36 73.55 55.86 TotalAssets (Rs. In crores) 9,835.33 7,562.48 7,053.43 5,919.16 5,290.99
  15. 15. Key financials of the Companies (Year-to-Year) Torrent Pharmaceuticals Item Mar ‘13 Mar ‘ 12 Mar ‘11 Mar ‘10 Mar ‘09 Total Income (Rs. In crores) 2,970.84 2,162.69 1,873.17 1,429.14 1,196.22 Percentage change in income from previous year 37.4% 15.5% 31.06% 19.5% - Total expenses (Rs. In crores) 2,197.51 1,698.06 1,418.23 1,032.11 929.16 Net Profit (Rs. In crores) 546.42 311.25 290.86 207.37 186.73 Percentage change in Net Profit 75.6% 7.01% 40.3% 11.05% - Total Equity Dividend (Rs. In crores) 194.61 71.92 67.69 50.77 33.84 Shares in issue (in Lacs) 846.11 846.11 846.11 846.11 846.11 Earnings Per Share (Rs.) 64.58 36.79 34.38 24.51 22.07 Book value (Rs.) 195.14 154.17 129.18 104.11 86.59 TotalAssets (Rs. In crores) 2,230.25 1,764.65 1,665.09 1,403.26 1,214.75
  16. 16. Key financials of the Companies (Q to Q) Cipla Item Sept ‘13 June ‘ 13 Mar ‘13 Dec ‘12 Sept ‘12 Net Profit for the period (Rs. Crores) 376.03 474.9 267.56 338.78 500.01 Percentage change in Net profit -20.81% 77.5% -21.02% -32.24% - Torrent Pharmaceuticals Item Sept ‘13 June ‘ 13 Mar ‘13 Dec ‘12 Sept ‘12 Net Profit for the period (Rs. Crores) 114 182 214 153 83.84 Percentage change in Net profit -37.36% -14.95% 39.86% 82.5% -
  17. 17. Cash Flow Comparison Item Cipla Torrent Pharmaceuticals Net Cash FromOperating Activities (Rs. In crores) 1,381.34 -68.69 Net Cash (used in)/from investing Activities (Rs. In crores) -2,064.16 -89.48 Net Cash (used in)/from Financing Activities (Rs. In crores) 732.83 25.49 Net (decrease)/increase In Cash and Cash Equivalents (Rs. In crores) 50.01 -132.68
  18. 18. Financial Ratios Comparison Ratios Cipla Torrent Pharma InventoryTurnover Ratio 3.5 3.98 DebtorsTurnover Ratio 5.18 4.46 InvestmentsTurnover Ratio 3.5 3.98 Fixed AssetsTurnover Ratio 1.65 2.35 Total AssetsTurnover Ratio 0.83 1.25 AssetTurnover Ratio 0.94 1.38
  19. 19. Ratio Analysis- FY2013 Face value 2 5 Comment: The Interest rates are lower than the Bond’s Coupon Rate for Torrent- Bonds are sold at a premium. The nominal value or rupee value of a security stated by the issuer.
  20. 20. Ratio Analysis- FY2013 Current Ratio 1.95 1.59 Comment: Cipla can better meet its liabilities which are due over the next 12 months and save more money. =Current Assets/ Current Liabilities
  21. 21. Ratio Analysis- FY2013 Quick Ratio 1.68 1.24 Comment: The position of Cipla is better. =Quick Assets/ Current Liabilities
  22. 22. Ratio Analysis- FY2013 Debt Equity Ratio 0.11 0.3 5 Comment: Torrent has a high debt load than Cipla =Total Debt/ Shareholder Equity
  23. 23. Ratio Analysis- FY2013 Net Profit Margin 17.87 % 18.85 % Comment: Torrent more efficient in converting Sales into actual Profit =PAT/ Revenue
  24. 24. Ratio Analysis- FY2013 Return on Capital Employed (ROCE) 20.79 % 33.14 % Comment: The Rate at which Torrent borrows is good =EBIT/ (Total Assets-Current Liabilities)
  25. 25. The Better One – In terms of growth rate Year toYear highest 39.22% 75.6% Quarter to Quarter highest 77.5% 82.5%
  26. 26. The Better One – In terms of ratios More Liquidity Better Net Profit Margin Less Debt Better ROCE

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