Financial Accounting

CIPLA
Caring for life

Balance Sheet Analysis

AGENDA
Overview CIPLA Significant accounting policies Share price analysis Cash flow statement analysis Dupont analysis and comparison
- Aurobindo Laboratories Ltd - Dr. Reddys Laboratories Ltd

Comparison with industry average

- PE Ratio - EPS

Analysis
- BODs report
11/23/2013 PRAXIS BUSINESS SCHOOL 2

OVERVIEW - CIPLA
Founded in 1935
Dr K A Hamied sets up "The Chemical, Industrial and Pharmaceutical Laboratories Ltd.

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PRAXIS BUSINESS SCHOOL

SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting Use of Estimates Principles of Consolidation Fixed Assets Borrowing Costs Depreciation Inventories Foreign Exchange Transactions Employee Benefits
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Research and Development Expenditure on Regulatory Approvals Investments Revenue Recognition Income Tax Impairment of Assets Government Grants Provisions and Contingent Liabilities

PRAXIS BUSINESS SCHOOL

SHARE PRICE ANALYSIS

Cipla
Rs. 330.00 19500.00 Rs. 320.00

Sensex
19000.00
18500.00

Rs. 310.00

18000.00 17500.00 17000.00

Rs. 300.00

Rs. 290.00

Cipla

16500.00 16000.00 15500.00

Sensex

Rs. 280.00

Rs. 270.00

15000.00
Rs. 260.00 14500.00 14000.00 1 4 7 1013161922252831343740434649525558 1 4 7 1013161922252831343740434649525558

Rs. 250.00

9.8% Decline
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CIPLA.XLSX
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SHARE PRICE ANALYSIS

Ranbaxy
600 19500.00 19000.00 500 18500.00 18000.00 400 17500.00 17000.00 300 Ranbaxy 16500.00 16000.00 15500.00 100 15000.00 14500.00 0 14000.00 Sensex

Sensex

200

1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58

1 4 7 1013161922252831343740434649525558

7.7% Decline
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RANBAXY.XLSX
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CASH FLOW ANALYSIS

In the current period the companys Cash & Cash equivalents have increased almost 38.28% to 84.13 crore from 60.84 crore, this hints that the spending have decreased to that extent in the current year. Since there was a reduction of 41.68% in the sale of other investments it shows that company is holding on to investments. The statement shows that the company has purchased investments worth 5228.18 crore a decrease of 41.6% compared to last year.

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CASH FLOW ANALYSIS

The outflow for fixed asset investment has also increased by 29.93% as compared to last year. This gives an indication about more Investments in infrastructure by the company recently. 4.06% decrease is seen in dividends received on Investments. The company has sold major fixed assets (a 229.9% increase compared to last year) recently as is evident from sales proceeds from Fixed Assets. Last year subsidiaries paid back 17.6 crore but this year company has given 204.47 crore to subsidiaries. 224.33 % increase in inventory from last year.

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DUPONT ANALYSIS
CIPLA
ROTA (PBIT/TA) 14.64%

TURNOVER (REVENUE/TA) 78.64%

OPERATING PROFIT (PBIT/REVENUE) 18.6%

CA LEVERAGE (SALES/CA) 130.6%

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DUPONT ANALYSIS
CIPLA
ROTA TURNOVER OPERATING PROFIT CURRENT ASSET LEVERAGE

AUROBINDO
15.59% 79.09% 19.72% 123.85%

DR. REDDYS
15.4% 77.24% 20.02% 115.72%

14.64% 78.64% 18.6% 130.6%

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EARNINGS PER SHARE

EPS =
PAT No. of Shares EPS 2121.78

PAT (in crore) No. Of Shares

Aurobindo 5938 Dr. Reddys 8934

Glenmark

270272053 78.51

291121290 203.97

168845585 529.12

INDUSTRY AVERAGE = 270.53

PAT
CIPLA 960.39

No. of Shares
802921357

EPS
11.96

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P/E RATIO
P/E =
Mkt. Price/Share 283.6

STOCK PRICE EPS

Aurobindo 195.9 Dr. Reddys 1638.55

Glenmark

EPS
P/E Ratio

78.51
3.61

203.97
0.96

529.12
3.10

INDUSTRY AVERAGE = 2.56 Mkt. Price/Share

CIPLA
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EPS
11.96

P/E Ratio
26.84
12

321.05

PRAXIS BUSINESS SCHOOL

ANALYSIS - BODs REPORT

Domestic turnover rose by 12 per cent while export income went up by 16 per cent. Profit after tax for the year was 960 crore compared to 1081 crore last year, excluding the onetime sale of the I-pill brand last year. Sales & Other Income 7000 crore There was a dip in operating margins of about 3 per cent, as a percentage of total revenue. This was mainly due to lower technical fees (60 crore compared to 150 crore last year) In April 2010, the Company commenced commercial production of pharmaceutical formulations at the Special Economic Zone (SEZ) project, at Indore, Madhya Pradesh. The total investment for this project is about 900 crore. Ciplas fixed asset grew to 4200 crore from 3600 crore. Ciplas share holder fund reduced from 6800 crore to 5900 crore.
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ANALYSIS - BODs REPORT

During the year under review, almost 55 per cent of the total income originated from international markets. On the occasion of Ciplas Platinum Jubilee, the Company announced setting up of the Cipla Foundation by contributing a sum of 5 crore. The Directors recommend a final dividend of Rs. Per share on 80,29,21,357 equity shares of Rs.2 each for the year 2010-11 amounting to Rs. 160.58crore. The total dividend payout for the year 2010-11 inclusive of dividend tax would aggregate to Rs.261.53 crore. CIPLA contributed significant net foreign exchange earnings to the tune of USD 420 million.

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