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This project would have been difficult to complete without the invaluable contributions from some important persons. Let me take this opportunity to thank them. First of all, I would like to thank Globe Capital Market Ltd. for giving me such challenging projects to work upon. I would also thank Mr. Sunil Taparia, Business Head, Globe Capital Market Ltd. for giving this opportunity to work with the organization. I hope this challenge has brought the best out of me. I am indebted to my project guide Mr. Ritesh Purohit, Assistant Vice President (Business Development), and I would like to take this opportunity to thank you sir for the patience you showed in solving my problems and for the direction and support you gave to this project through your invaluable insights, which constantly inspired me to think beyond the obvious. Your encouragement and co-operation helped me instill a great degree of self-confidence to deliver a good work. I am also thankful to Mr. Yuvraj Malhotra, Advisor (Finance) who gave his valuable inputs in the project and helped me in learning about the in this short period of two months. I am also thankful to Ms. Ruchi Paliwal (Faculty mentor) for taking constructive interest in my project and providing me valuable support at many point of time. And last but not the least; I would thank all the employees of Globe Capital Market Ltd. who provided me with an environment conducive for learning during the Eight weeks. I hope I can build upon the experience and knowledge that I have gained here and make an important contribution towards this industry in the coming future.
1. Executive Summery…………………………………………………………… 4 2. Introduction to topic…………………………………………………………… 6 3. Company Profile……………………………………………………………….. 10 i. ii. iii. iv. v. vi. vii. viii.
About the company……………………………………………………...10 Promoters………………………………………………………………..10 Vision and mission………………………………………………………11 Core values………………………………………………………………11 Organization Structure…………………………………………………. 13 Services………………………………………………………………... 14 Porter’s five forces analysis……………………………………………. 18 Competitive 21 analysis……………………………………………………
Marketing Strategies…………………………………………………… 24 SWOT analysis………………………………………………………… 27
4. Project undertaken in organization……………………………………………. 32 5. Report on business unit……………………………………………………….. 35 6. Understanding of functional process………………………………………….. 39 i. ii. iii. iv.
Introduction…………………………………………………………… 39 Fundamental analysis………………………………………………….. 39 Procedure……………………………………………………………... 41 In depth fundamental analysis of pharmaceutical industry…………… 49
A. Global pharmaceutical industry…………………………………… 49 B. Economic analysis…………………………………………………. 52 C. Industry analysis…………………………………………………… 55 2
D. Company analysis………………………………………………… v.
59 63 64
Comparative financial statement analysis…………………………….
A. Current ratio………………………………………………………
B. Quick ratio………………………………………………………… 66 C. Debt equity ratio…………………………………………………… 68 D. Gross profit margin……………………………………………….. 70 E. Operating profit margin…………………………………………… 72 F. Net profit margin………………………………………………….. 74 G. Return on equity…………………………………………………… 76 H. Dividend per share…………………………………………………. 78 I. J.
Earning per share……………………………………………………80 Dividend pay out ratio………………………………………………82
K. Interest coverage ratio……………………………………………….84 L. Inventory turn over ratio…… ………………………………………86 M. Receivable turnover ratio……………………………………………
7. Key learnings…………………………………………………………………… 91 8. Bibiliography…………………………………………………………………. 92
Fundamental equity analysis helps in analyzing the strength and assets of the company. As an investor it is always difficult to decide which company to choose for investment and how to find out the company that is strongest and has good future prospects. Main purpose of investment is returns and liquidity. 4 .PART-A CHPTER-1 EXECUTIVE SUMMERY FUNDAMENTAL ANALYSIS involves analyzing the characteristics of a company in order to estimate its market value.
BIOCON. meeting almost 95% of the country’s pharmaceuticals needs. All fundamental analysis starts from economic analysis of the country and further goes with industry and company analysis. CIPLA. biotechnology and IT. The country's pharmaceutical sector has become a prominent provider of healthcare product. Analyzing the Indian Pharmaceutical Industry focuses and analyses each and every aspect of the industry using SWOT. The major players are RANBAXY. So that in a relatively short time frame have an idea of how a company is traveling. RITESH PUROHIT. DR. India is a reputed name the world generic market. PEST and PORTER analysis. MANKIND etc. LUPIN. Company analysis starts from company’s Financial Statement and compare the companies within the industry and their relative assets. To realize the potential of the Indian Pharmaceutical Industry the pharmacy companies have to realize the potential of having strategic alliances. REDDY’S. liquidity ratios and other measures. I started studying various reports on PHARMACEUTICAL INDUSTRY and the companies that are the major player in this industry. The industry has gained strength from the strong Indian economy and strong sectors like health care. At the very least we will have to look at a company’s Income Statement (Profit and Loss Statement) and Balance Sheet. SUN PHARMACY.As assigned by my Corporate mentor Mr. 5 . insurance.
CHAPTER II INTRODUTION TO TOPIC The methods used to analyze securities and make investment decisions fall into two very broad categories 1. Fundamental analysis 2. it doesn't care one bit about the "value" of a company or a commodity. Technical analysis takes a completely different approach. Fundamental analysis involves analyzing the characteristics of a company in order to estimate its value. Despite all the 6 . Technical analysis. Technicians (sometimes called chartists) are only interested in the price movements in the market.
In other words. On a broader scope. such as: Is the company’s revenue growing? Is it actually making a profit? Is it in a strong-enough position to beat out its competitors in the future? Is it able to repay its debts? These are very simple and involved questions. or trend. but we can perform fundamental analysis on any security. What is Fundamental Analysis? When talking about stocks. we can perform fundamental analysis on industries or the economy as a whole. as opposed to its components.fancy and exotic tools it employs. technical analysis really just studies supply and demand in a market in an attempt to determine what direction. will continue in the future. and there are literally hundreds of others we might have about a company. If you understand the benefits and limitations of technical analysis. It all really boils down to one question: Is the company’s stock a good investment? Think of fundamental analysis as a toolbox to help you answer this question. The term simply refers to the analysis of the economic well-being of a financial entity as opposed to only its price movements. Fundamental analysis serves to answer questions. Fundamentals: Quantitative and Qualitative 7 . fundamental analysis is a technique that attempts to determine a security’s value by focusing on underlying factors that affect a company's actual business and its future prospects. from a bond to a derivative. it can give you a new set of tools or skills that will enable you to be a better trader or investor. The term fundamental analysis is used most often in the context of stocks. technical analysis attempts to understand the emotions in the market by studying the market itself.
The big problem with defining fundamentals is that it can include anything related to the economic well-being of a company. When examining its stock. In our context. P/E ratio and many other quantitative factors. an analyst might look at the stock’s annual dividend payout. assets and more with great precision. often as opposed to its size or quantity. these are the less tangible factors surrounding a business . measurable characteristics about a business.We could define fundamental analysis as “researching the fundamentals”. The biggest source of quantitative data is the financial statements. but few companies on earth are recognized by billions of people.things such as the quality of a company’s board members and key executives. many analysts consider qualitative factors in conjunction with the hard. Turning to qualitative fundamentals. However. no analysis of Coca-Cola would be complete without taking into account its brand recognition. Quantitative factor Vs Qualitative factor: Neither qualitative nor quantitative analysis is inherently better than the other. its brand-name recognition. profit. earnings per share. quantitative fundamentals are numeric. Take the Coca-Cola Company. 8 . for example. The various fundamental factors can be grouped into two categories: quantitative and qualitative. patents or proprietary technology. Obvious items include things like revenue and profit. We can measure revenue. Anybody can start a company that sells sugar and water. It’s tough to put your finger on exactly what the Coke brand is worth. Qualitative – related to or based on the quality or character of something. Instead. quantitative factors. but fundamentals also include everything from a company’s market share to the quality of its management. Quantitative – capable of being measured or expressed in numerical terms. but that doesn’t tell us a whole lot unless we know what fundamentals are.
but you can be sure that it’s an essential ingredient contributing to the company’s ongoing success. This is clearly relevant because an investor wants to buy stocks that are trading at prices significantly below their estimated intrinsic value. Nobody knows how long “the long run” really is. you determine the intrinsic value of the firm to be $25. One of the primary assumptions of fundamental analysis is that the price on the stock market does not fully reflect a stock’s “real” value. In other words. the investment will pay off over time as the market catches up to the fundamentals. There is no point in buying a stock based on intrinsic value if the price never reflected that value. Technical analysis is the other major form of security analysis. After doing extensive homework on the company. let’s say that a company’s stock was trading at $20. this true value is known as the intrinsic value. By focusing on a particular business. The Concept of Intrinsic Value: Before we get any further. The big unknowns are: 1) You don’t know if your estimate of intrinsic value is correct 2) You don’t know how long it will take for the intrinsic value to be reflected in the marketplace. This leads us to one of the second major assumptions of fundamental analysis: in the long run. an investor can estimate the intrinsic value of a firm and thus find opportunities where he or she can buy at a discount. For example. the stock market will reflect the fundamentals. you determine that it really is worth $25. why would we be doing price analysis if the stock market were always correct? In financial jargon. If all goes well. After all. It could be days or years. Technical analysts solely based on the price 9 . we have to address the subject of intrinsic value. Criticism of Fundamental Analysis: The biggest criticism of fundamental analysis is technical analysis. This is what fundamental analysis is all about.
Using charts and a number of other tools. not caring about the fundamentals. through either fundamental or technical analysis. Followers of the efficient market hypothesis. CHAPTER III COMPANY PROFILE ABOUT GLOBE CAPITAL MARKET LIMITED Globe Capital is one of the largest growing investment solutions companies that provide a wide range of services to its vast and diversified client base.and volume movements of securities. all news about a company already is priced into a stock. 10 . The company has its corporate office in New Delhi with regional offices in Mumbai. making it impossible for anyone to meaningfully outperform the market over the long term. While it is possible to use both techniques in combination. and therefore a stock’s price movements give more insight than the underlying fundamental factors of the business itself. they trade on momentum. The efficient market hypothesis contends that it is essentially impossible to produce marketbeating returns in the long run. since the market efficiently prices all stocks on an ongoing basis. are usually in disagreement with both fundamental and technical analysts. any opportunities for excess returns derived from fundamental (or technical) analysis would be almost immediately whittled away by the market’s many participants. one of the basic tenets of technical analysis is that the market discounts everything. however. The rationale for this argument is that. Accordingly. Kolkata & Jaipur and growing network of more than 200+ offices across 150+ locations in India with overseas office in London and Dubai.
no matter what the market condition is. PROMOTERS 1. Globe Capital has grown consistently since inception. attracted US$ 42 million of equity capital in Foreign Direct Investment (FDI) from Citi Group and its representative is also on the Board of the Company. 11 . In 2008. Yashpal Mendiratta: Mr. He is also a co-founder of Icon capital ltd. Promoted by a group of professionals. Professionally he is a charted accountant with a rich experience of more than 20 years in global capital market. 1994 and 1999 2. Ashok Agarwal: Mr. we will always be driven by the sole mission for our clients that their money must grow. Mr. Globe Capital Market Ltd. Mendiratta is the founder and executive director of globe capital group in India. He is also a co-founder of Icon capital ltd. no matter what the asset nature is. professionally he is a charted accountant and has a rich experience of more than 20 years in global capital market VISION AND MISSION Vision: To become the leading and most respected financial solution company Mission: No matter what the size of our client is.Globe Capital accounts for more than 10% of NSE clearing volumes in its F&O segment. Mr. Agarwal is the founder and CEO of globe capital group in India. He has been the president of the Delhi stock exchange in 1993.
Always anticipate change and be prepared. Always Be Prudent: We apply wise financial and business strategies. Always Be Transparent: Integrity and honesty are at the heart of our business. 12 . Our clients rely on our experience. lf we serve our clients well. our own success will follow. judgment and analysis for their hard earned wealth to grow.CORE VALUES Always Be Client Centric: Clients' interests always come first. Always Be Foresighted: Long term relationship with our clients is more important than short term gains. We maintain highest ethical standards and demonstrate sound judgment in executing the responsibility.
Ashok Agarwal and Mr. Anurag Batra) PORTFOLIO (PMS) Mr. Yashpal Mendiratta) HR (Ms. K. parinita Rishi) INVESTMEN T BANKING (Mr. Suneel Raparia) OPERATION S (Mr. Manish Agrawal) IT (Mr. Ram Singh) ARBITRAGE (Shyam Sundar Khandelwal) . K Mittal CURRENCY (Mr.PROMOTERS ORGANIZATIONAL STRUCTURE (Mr. Ravi Rastogi) CDSLAND NDSL (Pradeep Khandelwal) 13 COMMODITY (Mr. Deepak Sadhwan) CONTRACT NOTES (Mr. Ramesh Kumar Ahuja) MARKETIN G (Mr.
charts. Commodities: 14 . 2. which is a high-end. Equity & Derivative Trading: Globe capital Trading platform offers online equity & derivative trading facilities for investors who are looking for the ease and convenience and hassle free trading experience. You can now trade in NSE and BSE simultaneously from any destination at your convenience.SERVICES: 1. You can also trade through us on phone by calling our designated representatives in the branches where you are registered as a client. and online assistance help you to take informed decisions. You can also trade through our branch network bt registering with us as our client. You can access a multitude of resources like live quotes. efficient and reliable execution of trades. We provide ODIN DIET application. integrated trading application for fast. advice. research.
i. We use ODIN DIET application to provide you with live trading terminals. and portfolios are customized to suit the unique requirements of investors. PMS pays attention to details. We provide trading platform to trade in DGCX and also clear trades of trading members being a clearing member.e. place orders and watch the confirmation. PMS aims at providing the same by investing on behalf of clients on the basis of well-conducted research. 5. We offer expert advice on Currency Arbitrage and Hedging strategies to our individual and corporate customers 4. Equities as an asset class outperform almost any other investment vehicle over a longer time period. In this segment. Mutual Funds & IPOs Distribution: 15 . You can get real-time streaming quotes. experience and expertise of our Fund Manager. 3. Portfolio Management: To address varying investment preferences Globe offers Portfolio Management services (PMS). Globe Capital have spread our wings globally by acquiring Membership of Dubai Gold and Commodities Exchange. Multi Commodity Exchange (MCX) and National Commodity Exchange of India (NMCE) offers you trading platform of NCDEX. MCX and NMCE. As a focused service. well supported by our research team. all on a single screen. Currency Trading: At Globe Capital Market we offer currency trading on both NSE FX and MCX SX and is supported by valued research. National Commodity and Derivative Exchange (NCDEX).Globe capital is a member of 3 major national level commodity exchanges.
We are registered with all major Fund Houses. Depository Participant With NSDL And CDSL: Globe also holds membership of two major Depositories in the country i.e. 6. who are continuously in need of opportunities for striking rich rewards on their investment. We have the 16 . 7. 8. Clearing Services: We also offer Clearing Services to the Trading Member in the F&O segment and are responsible for a significant chunk of the total clearing activities as high as 10% of the total clearing process. Globe Capital Market is the # 1 clearing member for both NSE FX and MCX SX in currency trading. NSDL and CDSL and is catering to over 65000 accounts.Globe Capital offers distribution and collection services of various schemes of all Major Fund houses and IPOs through its mammoth network of branches across India. Globe is registered with AMFI as an approved distributer of mutual funds. We assure you a hassle free and pleasant transaction experience when you invest in mutual funds and IPOs through us. Globe Research Based Advisory Services: Our massive R&D facility caters to need of investors.
Multi Commodity Exchange (MCX) 4. London) 10. We offer proactive and timely world class research based advice and guidance to our clients so that they can take informed decisions. MCX and NMCE. National Commodities & Derivatives Exchange (NCDEX) 5. Dubai Gold & Commodity Exchange (DGCX) 9. 17 . Central Depository Services Limited (CDSL) 8.best people. MEMBERSHIPS AND REGISTRATIONS 1. Portfolio Manager (Registered with SEBI) IMPORTANT MILESTONE: 1994 1999 2000 2000 2003 Globe became the member of National Stock Exchange. Bombay Stock Exchange (BSE) 3. Globe became the depository participant of CDSL. process and technology resources providing complete research solutions on equity. London Stock Exchange (FSA Registered Broking entity. National Securities Depository Limited (NSDL) 7. Globe acquired Trading as well as Clearing membership of NSE F&O. National Stock Exchange (NSE) 2. commodities. National Multi-Commodities Exchange of India Limited (NMCE) 6. IPOs and Mutual funds. Globe group acquired the membership of NCDEX. Globe became the depository participant of NSDL.
It uses concepts developed in Industrial Organization (IO) economics to derive five forces which determine the competitive intensity and therefore attractiveness of a market. Globe became clearing and trading member of Currency Derivatives in NSE. Attractiveness in this context refers to the overall industry profitability. They consist of those forces close to a company that affect its ability to serve its customers and make a profit. Porter referred to these forces as the micro environment. A change in any of the forces normally requires a company to re-assess the marketplace. An "unattractive" industry is one where the combination of forces acts to drive down overall profitability.2006 Globe group expanded globally and acquired the Trading & Clearing Membership of Dubai Gold and Commodity Exchange (DGCX) and London Stock Exchange in 2007 2007 2008 Globe became the clearing member of Bombay Stock Exchange in its F&O Segment. business model or network to achieve a profit above the industry average. Porter of Harvard Business School in 1979. The overall industry attractiveness does not imply that every firm in the industry will return the same profitability. 18 . PORTER’S FIVE FORCES: Porter's five forces analysis is a framework for the industry analysis and business strategy development developed by Michael E. Firms are able to apply their core competences. BSE and MCX. A very unattractive industry would be one approaching "pure competition". to contrast it with the more general term macro environment.
THE FIVE FORCES MODEL RELEVANT TO THE INDIAN BROKRAGE INDUSTRY 1. • Low Product Differentiation Proves Beneficial: The retail broking services provided by the various companies are homogeneous with very low product differentiation. This allows customers to enjoy a greater bargaining 2. The Bargaining Power Of Suppliers 19 . power. The Bargaining Power Of Customers • Lack of Expertise Curtails Bargaining Power: Retail investors often lack the knowledge and expertise in the financial sector that calls them to approach the broking houses.
dematerialization etc are Strengthening the retail brokerage market and attracting foreign companies to enter the Indian industry. Threat Of New Entrants • Entry of Foreign Players: New forms of trading including T+2 settlement system. • Online Trading Competes with Traditional Brokerage: There is an increasing demand for online trading due to consumer’s growing preference for internet as compared to approaching the brokers. • Increased Focus of Banks In Retail Broking: Various foreign banks like ABN Amro and others are planning to enter the Indian retail Brokerage industry. The Intensity Of Competitive Rivalry • Move towards Consolidation: Lots of brokerage companies are moving towards consolidation with the smaller ones. 4. The small firms are becoming either franchisees for the larger brokers or closing operations. The Threat Of Substitute Products • Alternative Investment Options: Various alternative forms of investment including fixed deposits with banks and post offices etc act as substitutes to retail 20 . 5. There is a growing dependence of corporate on broking houses with the rising number of IPO’s coming to the 3.• Increased Dependence On Ipos: market.
India Bulls India bulls is India's leading retail financial services company with 77 locations spread across 64 cities. and electronic trading capabilities. our over 750 Client Relationship Managers are India bulls is lead by a highly regarded management team that has invested Crores of rupees into a world class Infrastructure that provides real-time service& 24/7 access to all information and products. Now even various banks provide similar type of services. COMPETITIVE ANALYSIS Major players in industry: 1. Demat services and Insurance to enhance wealth and to achieve the financial goals. Derivatives. Its size and strong balance sheet allows providing varied products and services at very attractive prices.broking products and services. focused Relationship Managers. right at your fingertips. intelligent analytics. 21 powerful technology is complemented by our knowledgeable and customer . The India bulls This Professional Network offers real-time prices. India bulls offer a full range of financial services and products ranging from Equities. They also give the same service of portfolio management and wealth management. detailed data and news.
2. HDFC Securities 22 . MOSt was founded in 1987 as a small sub. E-Broking Services. MOSt is amongst the best-capitalized firms in the broking industry in terms of net worth. with a dominant position in both institutional and retail broking. UK. Commodities Trading. research-based value investing and implementation of cuttingedge technology have enabled it to blossom into a thousand-member team. In a recent media report MOSt was rated as one of the top-10 brokers in terms of business transacted for FIIs. respect for professionalism. The institutional business unit has relationships with several leading foreign institutional investors (FIIs) in the US. with just two people running the show. Depository Services. ethical and transparent business practices. 000 investors through 270 outlets spanning 150 cities and 22 states. Focus on customerfirst-attitude. The retail business unit provides equity investment solutions to more than 50. MOSt provides Advice. Its Value PMS Scheme gave a 160% post-tax return for the year ended March 2004.broking unit. Portfolio Management Services (PMS). In Asia Money Brokers Poll 2003 MOSt has been rated as the Best Domestic Research House. Hong Kong and Singapore.Based Broking.Mega Funds. Motilal Oswal Securities One of the top-3 stock-broking houses in India. while in 2000 and 2002 it has been rated as the Best Domestic Equity Research House and Second best amongst Indian Brokerage firms respectively 3. and IPO and Mutual Fund Investment Advisory Services.
IPQ subscriptions. they will also start offering the following online trading services on the BSE and NSE: •Buying and selling of shares on the BSE •Arbitrage between NSE& BSE •Trading in Derivatives on the NSE •Margin trading products.HDFC securities is a brand brought to you by HDFC Securities Ltd. They are also planning to include buying and selling of Mutual Funds. In a few months. 4. Depository Participant Services. Stock Exchange (NSE). To broaden the gamut of services offered to its investors. The company currently handles sizeable volumes traded on NSE and in the realm of online trading and investments. The services comprise online buying and selling of equity shares on the National Buying and selling of select corporate debt and government securities on the NSE would be introduced in a subsequent phase. it currently holds a reasonable share of the market. Right issues. Institutional Broking and Research Services. a 100% subsidiary of Religare Enterprises Limited is a leading equity and securities firm in India. The major activities and offerings of the company today are Equity Broking. purchase of Insurance policies and asset financing. the company offers an online investment portal armed with a host of revolutionary features. 5. Religare Securities Limited Religare Securities Limited (RSL). which has been promoted by the HDFC Bank& HDFC with the objective of providing the diverse customer base of the HDFC Group and other investors a capability to transact in the Stock Exchanges& other financial market transactions. Angle Broking 23 .
Are 1. Angel is also registered as a Depository Participant with CDSL MARKETING STRATEGIES: The environment for marketing has become dynamic and turbulent. Angel is committed to providing ‘Real Value for Money’ to all its clients. Equity. The Angel Group is a member of the Bombay Stock Exchange (BSE). Companies need to collect information about customers like and dislike and the reason once the information is collected they need to analyze it and devise new strategies to outperform their competitor some basic marketing strategies adopt by Globe Capital Market Ltd. For online trading Globe capital provide a software to its clients that is called ODIN DIET. Online Trading: Globe capital provides online trading to its all clients for all three segments i.e. Through this software clients can easily trade in stock market by themselves. National Stock Exchange (NSE) and the two leading Commodity Exchanges in the country: NCDEX & MCX. Without adequate preparation it difficult for organization to survive in such an environment. 24 . With its unique retail-focused stock trading business model. Angel has emerged as one of the most respected Stock-Broking and Wealth Management Companies in India. Commodity and Currency. Today.Angel Broking's tryst with excellence in customer relations began in 1987.
Call And Trade: Research analysts of company facilitate their premium customer to invest in high return yielding stocks on the basis of their own expertise. 6.2. Equity. 3. 5. SMS and Messenger Services: Investment tips are sent by company to its client on regularly basis. Attractive Demat A/C Schemes: Globe capital provide various attractive schemes for opening of a demat account i. 4. 350 per year for maintenance of demat account which is easily affordable for any client. Annual Maintenance Charges: Globe capital Charge only Rs. Company also has its own messenger “Globe IM” through which clients can directly chat with company’s analyst online.e. 3 In 1 A/C: Globe capital provides trading for all segments i. a client can open a demat account for life time in Rs 999/only (no maintenance charges) 25 .e. Currency and commodity through one demat account on the basis of client choice.
Attractive Brokerage Slab: the brokerage amount is basically depend on trading capacity of client or sub-broker of company i. public relation and sales promotion. the company charges between 0.03% in intraday for its sub-broker and 0.3 and 0. 10.03% for delivery and intraday to its retail client. Sales person make client through cold calling. 8. investment tips and other stock market news to its sub-brokers.1to 0. institutional clients and other premium clients.7. Booklets: Time to time company distributes some booklets regarding its products and services. brokerage and other charges. Personal Selling: Globe capital has a strong sales workforce.3 % in delivery and 0. They directly contact with people and tell them about the products and services and convert them into a client of company. Demo Classes: On the launch of a new products or services company Conduct demo classes to introduce it to its institutional client.e. sub-broker and employee at company’s head quarter.01 to 0. 9. 26 .
As such. and those which are external to the firm can be classified as opportunities (O) or threats (T).1 clearing member for both NSE FX and MCX SX in currency trading. 2. The SWOT analysis provides information that is helpful in the matching the firm’s resources and capabilities to the competitive environment in which it operates. Attracted US$ 42 million of equity capital in foreign direct investment (FDI) from city group and 27 . Has a net worth of approx Rs 4000 Crore. Robust financial health: Globe capital market ltd. Such an analysis of the strategic environment is referred to as a SWOT analysis. Globe capital market is the No. Largest clearing member: Globe offer clearing services to the trading member in the F&O segment and are responsible for a significant chunk of the clearing activities as high as 10% of the total clearing process. Strengths: 1. Environment factors which are internal to the firm usually can be classified as strengths (S) or weaknesses (W). it is an instrument in strategy formulation and selection.SWOT ANALYSIS: A scan of the internal and external environment is an important of the strategic planning process. In year 2008 Globe capital market ltd.
convenience and hassle-free trading under online sophisticated risk monitoring surveillance system. Company has a well-equipped IT system with state-of-the-art network capabilities and hi-tech statistical software tools. PMS pays attention to details. 1600 Crore in HDFC bank as security which is called margin money for its clearing services. Margin financing. PMS aims at providing the same by investing on behalf of clients on the basis of well-conducted research. The group. 3. 5. depository services for shares & commodities (ISO 9001: 2000) and web –based accounting. 4. derivatives and commodities (including international markets through DGCX and LSE). and portfolios are customized to suit the unique requirements of investors. 28 . mutual funds and IPO distribution. experience and expertise of our Fund Manager. Product and services: Company has a vast range of services which include trading in equity. Company has deposited Rs. As a focused service. is supported by a team of over 130 professionals from diverse backgrounds. All these system converge to provide customers easy accessibility. Strong information system: IT plays a major role for in success of any broking firm.its representative is also on the board of the company. well supported by our research team. Portfolio management services: To address varying investment preferences Globe offers Portfolio Management services (PMS). in addition to expanding its existing network. also plans to augment the existing product portfolio by entering into the growing businesses viz. Equities as an asset class outperform almost any other investment vehicle over a longer time period.
2. Firm has entered in retail broking just 2 years ago so.Weaknesses: 1. to compete with the giant in this segment i. India bulls. The company should adopt some strategies to increase the Business through existing clients. Weak brand recognition: In comparison of other broking house Globe Capital has a less brand recognition which is a major weakness for this firm. Opportunities: 1. Weak promotional strategies: The promotion and advertisement strategies of Globe capital are not as strong as its competitors. 29 . The advertisement through print and electronic media should be done to increase recall rate in customer’s mind. Visibility and presence : As the firm basically work for institutional broking so still a vast area is untouched this include rural area ad tier II and tier III cities. 3. where the firm need to open its branches or franchises. This is the right time for inventers to Re-enter the market. Developing Indian economy: Indian economy seems to be out of recession.e. still the brand recognition has to made. Firm is mainly working on institutional broking. HDFC securities etc.
Opportunities for market expansion: Market Huge untapped market in rural areas. insurance like other competitor i. letter of credit (LC). 3. In these area company can built some franchises or make sub-broker who are currently working as a small firm. Scope in retail Broking: The capital market in the last few years has turned out to be one of the favorable avenues for the retail investor. tier2 and tier3 cities and towns of India can be concentrated to increase the business. 30 . As company has taken entry in retail spectrum of share broking so some kind of marketing strategies should be adopted to become a well known brand in retail broking services 7. 5. ICICI. It reduces the salaries expenses of the company.2. New financial products: Company can enter in its own mutual fund. Other financial services: As Indian financial market is a robust market so some kind of services like Global depositary receipt (GDR). Many a banks are offering fund transfer services. The company can tie-ups for fund transfers to attracts customers of different banks. The company can tie up with reputed B school for trainee. SBI etc.e. merger demerger and acquisition can be provided to large scale entities likewise its Subsidiary Icon global market ltd. 6. 4. foreign currency convertible bonds (FCCB). Availability of qualified workforce: The increasing number of management graduates helps to get sales force at trainee levels at less salary. kotak mahindra. HDFC.
of clients any time.. Government and regulatory bodies’ i. The sub-broker and clients can switch to these firms as they are charging less brokerage. 3. Other threats: Companies must develop and implement physical. High degree competition: The increasing no. SEBI can charge more money or the regulation regarding broking can be tightened which can reduce the no. 31 . administration and technical safeguards to achieve the following goals: • Ensure the security and confidentiality of customer records and information • Secure against any anticipated threats or hazards to the security or integrity of such information • Secure against unauthorized access to or use of such information that could result in substantial harm or inconvenience to any customer.e. Threats: 1. of broking firm is becoming a major threat for the company. Fluctuation in government policies: Changes in regulatory framework of broking industry can be a big threat. 2.
e. construction. technical analysis as well as I was also assigned a job to gain knowledge about strategies of different broking firms and their sub-brokers. fundamental analysis. From first day of my internship I was told to go through some industry reports so I could gain valuable insights about these industries. KPMG. These published reports were from major research companies’ i. which was beneficial for me as well as for organization also.e. oil and gas and many more. Pharmaceutical. These reports helped me to choose an industry for Fundamental Analysis. steel. these reports gave me a valuable overview of these industries i. SSKI etc. health care. For industry analysis purpose I was also given some contacts of research analysts of different firms with whom I discussed about current scenario and future prospects of 32 . IBEF.Chapter IV PROJECT UNDERTAKEN IN ORGANIZATION In my summer internship programme I was working in research department where during eight weeks of time period several tasks were assigned to me like industry analysis. FICCI. power.
From the discussion with these people I got to know the major factors which contribute in growth of an industry. Government planning and budgeting for this particular sector. fundamental analysis. I also got to know. business model etc. iv. Jagannadham Thunuguntla. Equity Head. Economy of the country or size of economy. vi. SMC Capital Ltd. government policies. iii. i. So this presentation helped me and other staff members a lot to gain a better insight about Pharmaceutical industry. Major cost components. After this presentation I was told to choose any three companies of this industry and to do comparative company analysis.these industries. what are the key points one should keep in mind while doing industry analysis i. Sameer Relia.e. I gave presentation on Pharmaceutical industry as I have chosen this industry for my topic. Growth opportunities in the industry Market share of major players. Contribution of particular industry in this economy. viii. Regulatory bodies and their policies. v. Some of these analysts are Mr. Operating profit margin of top ten companies of industry. Atherstone Global Securities Limited and Mr. Managing Director. The presentation was helpful for me as well as for company staff because it is not possible for a person to have a thorough knowledge about all the industries and it is very necessary for any research team to be well up to date about every industry. vii. Business model of industry. I gave a presentation on an industry of my choice to my mentor and other office staff. The presentation was on the basis of some key points. which was basically a financial statement analysis of all the companies and to suggest which one can be a better option for a long term 33 . ii. After getting through these reports and discussions.
demat charges. marketing strategies etc. In which I learnt about price-volume chart. Cipla. I calculated these technical indicators During these days I was also told to collect some useful data from sub-brokers of company’s competitors i. This was also very important for the company to know their competitor’s strategies. their investors and an individual customer. brokerage. SBI and Bharti Airtel. For three companies. which I performed successfully with my total efficiency. through this information I got to know how a broking firm performs business. how a research team of any financial services provider works and how the research done by this team is beneficial for companies. Infosys. RSI and moving average convergence divergence (MACD) etc. These all tasks were assigned to me in my summer internship. 34 .e.investment. which were Sun pharmacy. could not get a detailed knowledge about their implementation in equity market. That gave me valuable learning. For this analysis I chose three companies from NIFTY 50 index. I have also calculated them during my internship but due to short period of time. Apart from the industry analysis and comparative financial statement analysis I also got an opportunity to get a brief knowledge about technical analysis. Ranbxy.
CHAPTER V REPORT ON BUSINESS UNIT: The different business units in the organization: 35 .
marketing. ROLE OF RESEARCH DEPARTMENT: 36 . The Research Department plays a major role in a broking firm or any other research based investing organization. Research can be defined as the search for knowledge or any systematic investigation to establish facts. Operations.Globe Capital Market ltd.e. which analyzes securities and markets using both fundamental analysis and technical analysis and some other techniques. Among these all departments I got an opportunity to do work in the Research Department. basically has several departments i. research and information technology.
not profit. 2% of company revenue. We should also keep in mind that all the recommendations should be reliable and based on true facts and figures. is very important in advisory services where as an analyst or advisor. that is. processes. So this dept. We analyze these ideas and develop solutions or prototypes which are tested in close cooperation with the traders. Research department plays an important role in improving current and developing new trading algorithms. So how much is reasonable to spend on research? That is highly dependent both on the technology area and how fast the market is moving. We do this in close cooperation with the trading department. In a full-service brokerage firm an analyst of research department analyzes and studies the markets and securities and issue recommendations. why a company is more successful and prospering.companies which do not spend sufficiently in R&D are often said to be 'eating the seed corn'. you need to give suggestions and recommendations to your clients. might be enough 37 . Research plays an important role in maintaining and improving the leading status of a proprietary trading firm worldwide. when their current product lines become outdated and overtaken by their competitors. they will not have viable successors in the pipeline. processes and services that fulfill market needs. how to invest in this company will yield profit and what are the various strategies that a company uses to be successful in this competitive world. This is possible only if we have done a detailed study and research on that industry or company and a competitive analysis that. Basically Research and development expenditures are an investment in a company's future .This Department Discovers new knowledge about products. Suggestions may come from the traders. and services. and then applying that knowledge to create new and improved products. but the department also generates new ideas itself.
strategies etc. To do research the first and the foremost requirement is information about any industry. working. and development one to five years. both for a company and for a country or world. It is always difficult in times of tight money justify spending significant sums on something that may not yield returns for another ten to fifteen years. Older standards hold that research looked at least five to ten years into the future.in a fairly sedate market. but to keep up in rapidly changing markets. companies should expect to spend 15% or more in research and development just to keep up with the rest of the pack. but those timeframes have shortened as the speed of technology has increased. RELATION WITH OTHER DEPARTMENT Research and IT: - In the present scenario it is very difficult to imagine work without computers and internet where it has become a medium of communication and social networking. Research and Marketing: 38 . if ever. for its information needs. But spending on research and development is vital to continued growth and prosperity. company. its functioning. Research department depends on greatly on IT dept.
So Human resource is a very important part of research and advisory services. CHAPTER VI UNDERSTANDING OF FUNCTIONAL PROCESS INTRODUCTION The time one talks about stock market. 39 . Investors can surely take out profit from market very easily with the help of equity research which includes both technical and fundamental analysis. Research and HR: Research is a tedious task which requires a lot of patience and it cannot be computerized because it requires human skills and knowledge.To do marketing for any product or service we should have a complete knowledge of that area. The future prospects of a company can also seen using this analysis. another word also clicks and that is risk. This is possible only when you have researched about which product is better in what ways and why should one go for it and for whom that is good? For example investment in which stock is good varies from person to person depending on his needs whether he wants to invest for long term or short term. Stocks are just like gamble for those who don’t know how to invest. people have lost their millions in this stock market. It helps one to take out this money with sufficient if not unlimited profits. Equity research also includes detailed study of some companies that would help one to compare those companies and decide which is better to invest in.
Industry analysis 3. bottom up analysis and top down analysis. Fundamental analysis includes: 1. Technical analysis FUNDAMENTAL ANALYSIS Fundamental analysis of the business involves analyzing its financial statements and health.Basically equity research includes two techniques: 1. There are several possible objectives: • • • • To conduct a company stock valuation and predict its probable price evolution. its management and competitive advantages. Company analysis 40 . its competitor and markets. Economic analysis 2. Fundamental analysis is performed on historical and present data. but with the goal of making financial forecasts. To make a projection on its business performance. To calculate its credit risk. Fundamental analysis 2. When analyzing a stock using fundamental analysis there are two basic approaches one can use. To evaluate its management and make internal business decisions.
• The bottom-up investor starts with specific business. Financial statements are the medium by which a company discloses information concerning its 41 . if it is equal to market price hold the share and if it is less than the market price sell the shares. He narrows his search down to regional/industry analysis of total sales. exchange rates. price levels. regardless of their industry/region. Only then he narrows his search to the best business in that area. and entry and exit from the industry. PROCEDURE: The major part of fundamental analysis is to analyze a company’s financial statements which are disclosed by every listed company in the last of its financial year. such as GDP growth rates. This is considered as the true value of the share. If the intrinsic value is higher than the market price it is recommended to buy the share. the effects of competing products. inflation. • The top-down investor starts his analysis with global economics. including both international and national economic indicators. foreign competition.On the basis of these three analyses the intrinsic value of the share are determined. interest rates. Top-Down and Bottom-Up Approach: Investor can use either a top-down or bottom-up approach. productivity and energy prices.
also commonly known as sales.or high profits relative to revenue . The best way for a company to improve profitability is by increasing sales revenue. thee statements in detail: 1. Often. Followers of fundamental analysis use the quantitative information gleaned from financial statements to make investment decisions. balance sheets and cash flow statements. general and administrative expenses (SG&A). Basically. Cost of goods sold is the expense most directly involved in creating revenue. Generally speaking. fundamentals to investors. is generally the most straightforward part of the income statement. On the basis of these statements Ratio analysis is done which helps to Let’s examine the analysis of investor in his investing decisions in a particular stock. The three most important financial statements . how much it spent (expenses) and the difference between the two (profit) over a certain time period. The Expenses: There are many kinds of expenses. It represents the costs of producing or purchasing the goods or services sold by the company. The Income Statement: The income statement is basically the first financial statement we will come across in an annual report. companies ought to be able to bring in more money than they spend or they don’t stay in business for long. 42 . the income statement shows how much money the company generated (revenue).signal strong Revenue as an Investor Signal: Revenue.financial performance. but the two most common are the cost of goods sold (COGS) and selling. there is just a single number that represents all the money a company brought in during a specific time period. Those companies with low expenses relative to revenue .income statements.
Gross profit is calculated as revenue minus cost of goods sold. technology expenses and other general costs associated with running a business. or that sales are increasing faster than operating costs. Companies with high gross margins will have a lot of money left over to spend on other business operations. including financial expenses. such as R&D or marketing. 43 .Next. This number is often called the "bottom line" and is generally the figure people refer to when they use the word "profit" or "earnings". most simply put. it usually means that it also has one or more advantages over its competition. An investor can gain valuable insights about a company by examining its income statement. Companies with high net profit margins have a bigger cushion to protect themselves during the hard times. PROFITS = REVENUE . is equal to total revenue minus total expenses. Rising margins indicate increasing efficiency and profitability.EXPENSES Profit. salaries. Net income generally represents the company's profit after all expenses. have been paid. However. costs involved in operating the business are SG&A. When a company has a high profit margin. there are several commonly used profit subcategories that tell investors how the company is performing. utility bills. This number represents the profit a company made from its actual operations. Increasing sales offers the first sign of strong fundamentals. This category includes marketing. Operating profit is equal to revenues minus the cost of sales and SG&A. High operating margins can mean the company has effective control of costs.
Unless the company is in financial distress and is liquidating assets. also known as the statement of financial condition.e. also commonly called "net assets" or "shareholders equity". offers a snapshot of a company's health. plant and equipment (PP&E). Non-current assets are defined as anything not classified as a current asset. how much cash and equivalents it possesses and what kinds of funds the company has generated over time. how much debt the company has. Assets: There are two main types of assets: current assets and non-current assets. and how much it owes (its liabilities). cash. The balance sheet tells investors a lot about a company's fundamentals i. It tells you how much a company owns (its assets). The difference between what it owns and what it owes is its equity. Carefully analyzed.usually treated as twelve months. Assets. investors need not pay too much attention to fixed assets. Balance Sheet: The balance sheet.2. they can tell investors a lot about a company's fundamentals. Current assets are likely to be used up or converted into cash within one business cycle . inventories and accounts 44 . how much it needs to collect from customers (and how fast it does so). Three very important current asset items found on the balance sheet are: receivables. liability and equity are the three main components of the balance sheet. such as property. This includes items that are fixed assets.
Companies produce and consume cash in different ways. non-current liabilities represent bank and bondholder debt. financing and investing.Liabilities: There are current liabilities and non-current liabilities. so the cash flow statement is divided into three sections: flows from operations. Typically. meanwhile. 45 . less the amount of cash needed to make and sell those goods and services. Investors tend to prefer companies that produce a net positive cash flow from operating activities. It also includes acquisitions of other businesses and monetary investments such as money market funds. such as new equipment or anything else that needed to keep the business going. represent what the company owes in a year or more time. Non-current liabilities. it might show artificially high cash inflows in the current year which may not be sustainable. 3. Current liabilities are obligations the firm must pay within a year. depreciation expenses each year. cash Cash Flows from Operating Activities: It shows how much cash comes from sales of the company's goods and services. such as payments owing to suppliers. Investor should see a company re-invest capital in its business by at least the rate of If it doesn't re-invest. Cash Flows from Investing Activities: It shows the amount of cash the company has spent on capital expenditures. The Cash Flow Statement: The cash flow statement shows how much cash comes in and goes out of the company over the quarter or the year.
Cash Flow from Financing Activities:
This section describes the
goings-on of cash associated with outside financing activities. Typical sources of cash inflow would be cash raised by selling stock and bonds or by bank borrowings. Likewise, paying back a bank loan would show up as a use of cash flow, as would dividend payments and common stock
Cash Flow Statement Considerations:
Investors should invest in
companies that produce plenty of free cash flow (FCF). Free cash flow signals a company's ability to pay debt, pay dividends, buy back stock and facilitate the growth of business. Free cash flow, which is essentially the excess cash produced by the company, can be returned to shareholders or invested in new growth opportunities without hurting the existing operations. The most common method of calculating free cash flow is:
Ideally, investors should see that can company pay for the investing figure out of operations without having to rely on outside financing to do so? If a company is able to
pay for its own operations and growth than it is a signal to investors that it has very strong fundamentals.
Ratio analysis isn't just comparing different numbers from the balance sheet, income statement, and cash flow statement. It's comparing the number against previous years, other companies, the industry, or even the economy in general. Ratios look at the relationships between individual values and relate them to how a company has performed in the past, and might perform in the future.
Ratio analysis is an attempt to derive quantitative measure or guides concerning the financial health and profitability of business enterprises. Ratio analysis can be used both in trend and static analysis. There are several ratios at the disposal of an analyst but their group of ratio he would prefer depends on the purpose and the objective of analysis.
Objective of Ratios: Ratio is work out to analyze the following aspects of business organizationA) Solvency1) Long term 2) Short term 3) Immediate B) Stability C) Profitability
D) Operational efficiency E) Credit standing F) Structural analysis G) Effective utilization of resources H) Leverage or external financing
Types of Comparisons:
The ratio can be compared in three different ways –
1. Cross Section Analysis: One of the way of comparing the ratio or ratios of the
firm is to compare them with the ratio or ratios of some other selected firm in the same industry at the same point of time. So it involves the comparison of two or more firm’s financial ratio at the same point of time. The cross section analysis helps the analyst to find out as to how a particular firm has performed in relation to its competitors.
2. Time Series Analysis: The analysis is called Time series analysis when the
performance of a firm is evaluated over a period of time. By comparing the present performance of a firm with the performance of the same firm over the last few years, an assessment can be made about the trend in progress of the firm.
3. Combined Analysis: If the cross section & time analysis, both are combined
together to study the behavior & pattern of ratio, then meaningful & comprehensive evaluation of the performance of the firm can definitely be made. A trend of ratio of a firm compared with the trend of the ratio of the standard firm can give good results. For example the ratio of operating expenses to net sales for firm may be higher than the industry average however, over the years it has been declining for the firm, whereas the industry average has not shown any significant changes.
The less expensive means to raise research productivity is outsourcing research to low cost having such as India and China.1 per cent in the last 23 years to $491 billion. For the analysis purpose I was provided some reports on the pharmaceutical industry but as the fundamental analysis starts with the economy analysis and it was also essential to get some knowledge about the Global scenario of the industry I have chosen. Mergers and acquisitions reshaped multinationals. Bringing a new drug into the market costs a company an average of about $800 to $900 million. GLOBAL PHARMACEUTICAL INDUSTRY Globally. to get in depth knowledge about fundamental analysis. Some of the major trends that are expected in the future include mergers and acquisitions 49 . Some estimates show that patient recruitment and medical personnel account for nearly 70 per cent of the clinical costs that are required to bring a drug to market. these giants find themselves under immense strain to find new drugs and reduce price.IN DEPTH FUNDAMENTAL ANALYSIS OF PHARMACEUTICAL INDUSTRY In my summer internship programme. With a slew of brand name drugs losing patent protection in the next few years and the pressure building for pharmaceuticals to cut price. firstly I chose the pharmaceutical industry. The global pharmaceutical outsourcing market stands at $10 billion. pharmaceutical industry grew at a compounded annual growth rate of 9. which proceeds as follows: I.
regulatory standards Switching costs .in the industry. regulatory policies. any new entrant into the pharmaceutical sector will be faced with various hurdles that have been previously erected by already established businesses and by national and international standards and regulations. and research and 50 . technical assistance • • • • The barriers to entry are extremely high in the pharmaceutical industry. The largest factors that influence the success of many pharmaceutical companies are capital requirements and financial resources. These include: • • Economies of scale . new equipment. they have extensive patents that guarantee the protection of their products while they defend their brands with large marketing budgets. the overall threat of entry into the global marketplace is relatively low in comparison to other international industries.employee retraining. Many of the top firms have significant manufacturing capabilities that are hard to replicate.manufacturing. R&D. in-licensing of patented products by Indian companies to launch them in the Indian market and increase in the number of contract research organizations. Barriers to entry in the Global Pharmaceutical Industry: Like many industries.established products. brands and relationships Capital requirements and financial resources Access to distribution channels: preferred arrangements Regulatory policy: patents. marketing. Also. Since any emerging pharmaceutical company can expect a sharp retaliation from the established competitors in the pharmaceutical industry. sales Distribution product differentiation . new product launches by MNCs and Indian companies.
drug prices. threat of advertising & customer confidence. . worldwide market 6.outsourcing. poor quality drug candidates. future industry. -- greater end-user involvement. slow production of novel drug discovery technology. legal attack of patent validity.patent expiration. FDA regulations. M&A. A churning of pharmacy industry players will continue as both large 4. 5. Loss of patent protection . around 15% of the population and 40% in China are above the age of 60. biogenerics. 3. stock market performance. epidemiology. new medical needs emerge and the demand for effective medicines rises accordingly. sales & marketing practices 2. 51 . DTC employment. spin-outs.R&D. Factors affecting the pharmaceutical industry: 1. Industry player environment and small companies fight for survival. health crises. Socio-economic Trends bioterrorism.development. patent law reform. Patent expiration is no longer the only threat to patent protection. New product development . Government regulations . Social And Demographic Factors: As the population ages and the diseases increase. In Russia. All three of these factors can influence one another and a lapse in one area can be disastrous for the future of the company.
ECONOMIC ANALYSIS India. • Government has become more liberal and has reduced its control on foreign trade and investment and is heading its way towards privatizing the domestic sector. • It has a competitive and dynamic private sector that accounts for more than 75% of India's GDP.II. an emerging economy is the 12th largest economy in the world which is growing with an average GDP rate of 7% which is 2nd fastest in the world. • This has shown a marked increase in FDI and FII inflows (but we are lagging behind if we compare with China) 52 . • The democracy promotes a transparent environment that includes a free press and a proper legal and accounting system. While doing analysis of Indian economy I found: • India has a huge talent pool of managerial and technical manpower and this provides it with a competitive edge in the global market. In which service sector contributes maximum 54% following by manufacturing sector 29% and agriculture 17%.
• The weakness of India is the continuing public-sector budget deficit. 2) Inflation: The overall inflation averaged for the month of April 2010 stood at 9.6 percent as compared to the inflation of 1. management & technical consultancy. accounting for more than half of India’s output with less than one third of its labor force. India Gross Domestic Product is worth $1159 billion or 1. This is slated to continue to be the major contributor to the GDP in the years to come due to increase in importance of activities like trading. storage and communications to name a few. modern agriculture. security. traditional village farming. rising prices of foods and manufacturing products. The services sector is growing at a rate of around 12% and its contribution to GDP is maximum. infotainment. Some of the key factor contributes in Indian economy: 1) Gross Domestic Product: Indian Economy has experienced a growth rate of almost 7% and In the first three months the GDP in India expanded at the rate of 8. The major contributor to inflation are rising global and domestic fuel prices.6% which is boosted by industrial production and services.3 percent seen in the same month of previous year. lack of proper infrastructure to support the growth momentum. around 54%. inflation (which is now easing). restaurants.87% of the world economy. which is nearly 10% of GDP. handicrafts. hotels. transportation. 53 . Services are the major source of economic growth. banking & finance. according to the World Bank. real estate. All these industries are showing growth. a wide range of modern industries and a multitude of services contribute in India’s diverse economy. massive trade deficits in US.
3) Interest Rates According to monetary policies for year 2010-11 the bank rate has been retained at 6% Interest rates have been increased (CRR increased by 25 basis points from 5. As a result of the increase in the CRR. transportation.75% to 6.5% to 3. housing. 5) Money Supply And Exchange Rate: 54 . The expected outcomes of the actions are: • • • Inflation will be contained and inflationary expectations will be anchored. Policy instruments will be further aligned in a manner consistent with the evolving state of the economy • 4) Consumers Spending Power: The per capita income in India has grown by 10. healthcare.40141 in 2008-09.25% and increased the reverse repo rate by 25 basis points from 3. The major components of spending are– food. The growth in the economy has lead to increase in purchasing power and thus increase in spending power.44.75% ) by RBI. The recovery process will be sustained. entertainment. increased the repo rate by 25 basis points from 5. 12. apparel and services. Government borrowing requirements and the private credit demand will be met. at the current price. 345 in 2009-10 as against Rs. 500 Crore of excess liquidity will be absorbed from the system.0%.0% to 5. and personal insurance and pensions.5% to Rs. about Rs.
innovative scientific manpower. • • The top ten companies make up for more than a third of the market. pharmaceutical formulations. drug intermediates. capsules. These units produce the complete range of pharmaceutical formulations. orals and injectibles. low R&D costs. There are about 250 large units and about 8000 Small Scale Units. with its rich scientific talents and research capabilities. the pharmaceutical industry in India has low costs of production. • The Indian Pharmaceutical industry is highly fragmented with about 24.The money supply growth rate is much above the targeted range and the current liquidity built up in the economy could lead to inflationary expectations in coming months. chemicals. i. medicines ready for consumption by patients and about 350 bulk drugs. which form the core of the pharmaceutical industry in India (including 5 Central Public Sector Units). tablets. 000 players (around 330 in the organized sector). i. Chemicals having therapeutic value and used for production of pharmaceutical formulations. Enormous increase in liquidity is due to increase in capital The CRR hike and increase in interest rates will strengthen the rupee making foreign investment attractive. supported by Intellectual Property Protection regime is well set to take on the international market. Technologically strong and totally self-reliant.e. The Pharmaceutical Industry. III. strength of national laboratories and an increasing balance of trade. The leading 250 pharmaceutical companies control 70% of the market with top ten market leader holding nearly 30% of the market share. INDUSTRY ANALYSIS The pharmaceutical industry in India meets around 70% of the country's demand for bulk drugs. flows.e. 55 .
Barriers to entry: Licensing. despite growing at a CAGR of 53% over the last four years. the top five companies are spending about 5% to 10%.e. health insurance facilities and newer and better medicines are some of the factors facilitating immense growth potential in this industry. distribution network. • The new Pharmaceutical Policy 2006. • The average R&D spending in India as a whole is a meager 2% of sales. There are three tiers of regulations – on bulk drugs. clinical trials and custom synthesis and technical services like Bioinformatics. 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. on formulations and on overall profitability. • Indian pharmaceutical industry is significantly influenced by regulations. Contract manufacturing. • • • The Indian pharmaceutical industry accounts for about 1% of the world's pharmaceutical industry in value terms and 8% in volume terms. affordability due to rising income level of expanding middle class. The increasing health consciousness of people.• • The total value of Indian pharmaceutical sector was estimated of $13 bn in 2007 which is expected to reach $34 bn in 2012. Contract R&D. • According to eleventh five year plan the total plan budgetary required projected for the pharmaceutical industry is Rs. patents. Drug discovery and development. The annual per capita drug expenditure is still amongst the lowest in the world. • The new business model is emerging which is creating outsourcing opportunities i. This has made the profitability of the sector susceptible to the whims and fancies of the pricing authority. plant approval by regulatory authority.927 Crore and the major part of this money 56 . The ratio is still way below the global average of 15% to 20% of sales. While the global pharmaceutical industry is growing at the rate of 6% but still India’s share in world market will be 2015 which is just over 2% of global market. The industry is growing at an average rate of 8% over the last five years.
100% FDI is permitted in case of formulation of drugs. • When the government is looking to cut down healthcare costs in the developed markets by facilitating a speedy introduction of generic drugs into the market. • Government is planning to increase public spending on health to at least 2% to 3% of GDP over the next five years from the current 0. intense competition and consequent price erosion would continue to remain a cause for concern. being present across geographies. having a lean cost structure. for the latter.8%. which can provide further impetus to the pharmaceutical industry • FDI up to 74% is permitted through automatic route in the case of bulk drugs. There are about 250 large units and about 8000 Small Scale Units. • Due to 100% FDI allowed in this industry. drug intermediates. • A key to sustained growth and profitability in the highly competitive US market is by acquiring scale (possible through acquisitions). • Partnerships are likely to play a crucial role in driving growth going forward Currently India has the highest number of US FDA approved plants outside the US at 75. The pharmaceutical industry in India meets around 70% of the country's demand for bulk drugs. pharmaceutical formulations. tablets. despite this huge promise. capsules. the going might not be that easy. a balanced product mix comprising of niche products besides plain vanilla generics and a strong marketing and distribution network. That said. as they would make aggressive new launches. as prices of patented products would most likely be subject to ‘negotiations’. orals and injectibles. chemicals. 57 . Reddy’s will stand to benefit. companies like Ranbaxy and Dr.will be invested in Research and development which is the major growth indicator for this industry. their intermediates and formulations (except those produced by the use of recombinant DNA technology). However. domestic companies would face fresh competition from MNCs.
its consolidation through mergers and acquisitions. i. supported by Intellectual Property Protection regime is well set to take on the international market. the pharmaceutical industry in India has low costs of production. These units produce the complete range of pharmaceutical formulations. innovative scientific manpower. Technologically strong and totally self-reliant. medicines ready for consumption by patients and about 350 bulk drugs i.e. low R&D costs.which form the core of the pharmaceutical industry in India (including 5 Central Public Sector Units). its forward and backward integration capabilities.e. with its rich scientific talents and research capabilities. its R&D. co-marketing and licensing agreements. Chemicals having therapeutic value and used for production of pharmaceutical formulations. 58 . strength of national laboratories and an increasing balance of trade. Advantage to India • • • • • • Competent workforce Cost-effective chemical synthesis Legal & Financial Framework Information & Technology Globalization Consolidation The future of the industry will be determined by how well it markets its products to several regions and distributes risks. The Pharmaceutical Industry.
Industrial & Pharmaceutical Laboratories. Company analysis is basically based on financial statement analysis which includes balance sheet. It also offers drugs that prevent transmission of AIDS from mother to child. Cipla Ltd. Alzheimer's. It is appropriate to choose most liquid stock while doing a fundamental analysis so I chose three pharmaceutical company which stand in NIFTY 50 stock index. baked foods. It also offers a wide range of food and beverages. now known as Cipla. Almost 55% of overall incomes from its operations come from outside India. COMPANY ANALYSIS: Company analysis is the most important part of fundamental analysis. oral hygiene products. arthritis. detergents. It offers prescription drugs. bulk drugs. income statement and cash flow statement analysis. It has 5. mean in which sense and role he or she read and justify.IV. 59 . was incorporated 1935. cardiovascular diseases and many more. animal products and pesticides. Sun pharmacy and Ranbaxy. Cipla offers drugs used for treatment of cancer. Parkinson’s. Cipla. 500 registered products in various countries. The company analysis of all two companies which I have chosen is proceeds further: Overview of Companies: 1. Financial statement analysis is the main task which is based on the collected data and it is based on the analytical capacity and perception of the researcher. The company focuses on development of new formulations and has a wide range of pharmaceutical products. these companies are.: Chemical. room fresheners and personal care products.
Realizing the fact that research is a critical growth driver. several of these were introduced for the first time in India. In branded markets. it has reached leadership in each of the therapy areas that we operate in. was acquired from the multinational Knoll Pharmaceuticals in 1996. with a presence in 30 markets. Cipla has set up two institutes namely Dr K. Important products in Cardiology were then added. Strengthening market share and keeping this customer focus remains a high priority area for the company. gastroenterology. It also makes active pharmaceutical ingredients. with substantial capacity addition over the years. one of the first products launched at that time has since become one of our largest selling products. It is an international specialist pharmacy company. and are rated among the leading companies by key customers. diabetology and respiratory. conducts plant evaluation and supplies plant equipments. This was the first of 60 . and upgraded for approvals from regulated markets. 2. In India. they established their research center SPARC in 1993 and this created a base of strong product and process development skills. WHOCanada and MHRA-UK. Cipla was first company outside US and Europe to launch CFC-free inhalers. among others. Sun Pharmacy was listed on the main stock exchanges in India in 1994. psychiatry. its Ahmednagar plant. Sun Pharmaceutical Industry: Sun Pharmaceutical Industries began with just 5 products to treat psychiatry ailments in 1983.A. Hamied Institute and Cipla Cancer Palliative Care & Training Centre.The company provides consulting services on preparation of product and material. Sales were rolled out nationally in 1985. neurology. It has a presence across 170 countries with manufacturing units approved by regulatory authorities like USFDA. Another API plant. Products that are used in cardiology were introduced in 1987 and Monotrate. In 2007 Cipla launched oral emergency contraceptive pill under the brand name I-Pill. Sales were initially limited to 2 states West Bengal and Bihar. its products are prescribed in chronic therapy areas like cardiology.
Ranbaxy has its R & D centre that helps company to have long term competitive advantage. USA and Vietnam. branded generics. Hungary and Bangladesh. Dermatology. With world-class technology and a team of strong professionals. with products offering remedies in categories of Cough & Cold (Olesan 61 . India. Romania. Orthopedics. US. Expert quality teams ensure that systems and processes remain in compliance with the latest standards. it pursues to become Global leader in pharmaceutical sector. APIs and Dosage forms are made in 19 sites across India. 3. Central Nervous System. China. Active Pharmaceuticals and intermediates (API). Using the finest R&D and Manufacturing facilities. The company has global presence in 49 countries and is ranked amongst top ten global generics companies. Nigeria. Nutritionals and Urology. Ranbaxy Laboratories: Ranbaxy Laboratories is India's largest pharmaceutical company incorporated in 1961. A number of its plants hold approvals from the USFDA and the UK MHRA. 000 spread across 50 nations. It caters treatment to segment of diseases that includes Ranbaxy's top 20 products. Ireland. Pepfiz. In 2004 launched its first herbal range of products through New Age Herbals (NAH). it has built sites and systems that meet the most stringent international manufacturing standards. Respiratory. ranging from AntiCardiovascular.several sensibly priced acquisitions. Malaysia. Gesdyp & Garlic Pearls. infective to Dermatological. that manufactures and markets generic pharmaceuticals. value added generic pharmaceuticals. With workforce of over 12. Ranbaxy has world-class manufacturing facilities in 11 countries namely Brazil. In 2001 Ranbaxy entered consumer healthcare through launch of 4 brands Revital. account for revenues of over $ 600 Million. Japan. South Africa. each of which would bring important parts to the long-term strategy.
the flagship brand continues to maintain leadership in its segment. another popular brand. Isotretinon and many more 62 . Amoxycillin. Ciprofloxacin. It also produces molecules like Simvastatin. the business registered sales of $19 Million registering a growth of 19%. In 2005. During 2006. Revital.Oil & Cough Syrups) and Appetite Stimulant (Eat Ease). Chericof – The complete cough formula was introduced.
term assets (cash.COMPARATIVE FINANCIAL STATEMENT ANALYSIS OF CIPLA. Formula: Current Assets Current Liabilities 63 . the more capable the company is of paying its obligations. inventory and receivables). SUN PHARMACY AND RANBAXY FOR FINANCIAL YEAR 2008-2009 WITH INTERPRETATION. LIQUIDITY AND SOLVENCY RATIO: 1) Current Ratio: Current ratio is mainly used to give an idea of the company’s ability to pay its short-term liabilities (debt and Payables) with its short. The higher the current ratio.
81 SUNPHARMA 2743. This shows that Cipla is in better condition to pay its short term liabilities like short term loans and accounts payables Although the recommended current ratio is 2: 1 but Cipla and Sun Pharmacy have higher current ratio than recommended ratio which indicates both the entity can still utilize their current assets which can accelerate their growth.64 RANBAXY 6509.57 1568. 44 2.71 2.66 1038.64: 1 and Ranbaxy’s 1. although all the three companies have good current ratio but still Cipla has a current ratio of 2. where Ranbaxy is able to pay its short term liabilities but in case of emergency it may have to face some problems.42.98 4571. 31 1.42 Interpretation: From the comparison of the three Companies I found that. 64 .81: 1 in comparison of Sun pharmacy’s 2.CIPLA Current Assets Current Liabilities Current Ratio 4419.
Formula: Quick assets Current liabilities Where: Quick Assets = Current assets .31 1.2) Quick Ratio: A quick ratio indicates whether a firm has enough short-term assets to cover its immediate liabilities without selling inventory. Companies with ratio of less than 1 cannot pay their current liabilities.inventory CIPLA Quick Assets Current liabilities Quick ratio 3021.17 RANBAXY 5311 46 4571.25 1568.71 1.44 2.92 SUN PHARMA 2256.16 65 .92 1038.
1.16:1 for Ranbaxy but It shows that.92:1 for Cipla.17:1 for Sun pharmacy and 1.Interpretation: Although the quick ratio for all three companies is more than 1 i. The high difference of current ratio and quick ratio for Cipla shows it’s highly dependency on inventory for current assets.e. 66 . 2. This indicates that Cipla should emphasis to control the inventory level. From balance sheet we can get to know that Ranbaxy also has enough amounts of current assets to pay its short term liabilities but still it should emphasis on reducing its short term liabilities. Cipla and Sun pharmacy can easily meet the situation of urgency in comparison of Ranbaxy.
11 1.42 0.004 RANBAXY 3725.22 for Cipla and 0.22 SUN PHARMACY 23.05 Interpretation: The debt.24 4350.37 3541. this indicates that company can use debt to 67 .equity ratio for Cipla and Sun pharmacy is very less (0. The debt equity ratio for Sun pharmacy is approximately negligible in comparison of its owner’s fund.6 5151. Formula: Total long term debt Total share holder’s fund + reserves and surplus CIPLA long term debt Share capital Debt-equity ratio 940.75 0. A high debt-equity ratio generally means that a company has been aggressive in financing its growth with debt.3) Debt -Equity Ratio: Debt equity ratio indicates what proportion of equity and debt the company is using to finance its assets.004 for Sun pharmacy) which shows that both the companies have less borrowed fund to pay. This can result in volatile earnings as a result of the additional interest expense.
increase the shareholder’s benefit. the larger the shareholders’ earnings when the cost of debt is less than the firm’s overall rate of return on investment. Because the higher the debt-equity ratio. 68 . In comparison of Cipla and Sun pharmacy. this shows the opportunities to business expansion and new projects easily can be started due to availability of funds at cheaper rate. Ranbaxy is using more debt to operate its business which is a cheaper source of funds. Less debt-equity ratio of these companies also indicates towards their strong financial health which attracts to investors easily. Both companies can easily borrowed funds from banks and other sources.
A high gross profit margin implies that firm is able to produce at relatively lower cost.20 40.08 20.) Net sales CIPLA Gross Profit Net Sales Gross Profit Margin 5234. Formula: Net sales – Total expenditure (excluding S & D and miscellaneous exp. It shows.29 2095.PROFITABILITY RATIO: 1) Gross Profit Margin: A financial metric used to assess a firm’s financial health by revealing the proportion of money left over net sales after accounting for the cost of goods sold.61 41. It indicates the relation between production cost and selling price. both the companies are efficiently able to control production cost in comparison of Sun pharmacy and we can say both the companies have higher available funds to spend on its research and 69 .02% SUN PHARMA 2774.41% Interpretation: from the above table it can be determined that Ranbaxy and Cipla has higher gross profit margin than Sun pharmacy.04 1926.54% RANBAXY 4652.65 570.
development and Selling and Distribution activities. company. It shows their strong growth prospect in future as R&D activities plays a major role in growth of any pharmaceutical 70 .
Operating ratio to measure a company’s pricing strategy and operating efficiency. Operating margin is measurement of what proportion of a company’s revenue is left over after paying for variable costs of production such as wages, raw materials etc. Formula: Operating income Net sales
CIPLA Operating profit Net sales Operating margin 1244.84 5234.29 23.78%
SUN PHARMACY 80. 82 2774. 65 2.9%
RANBAXY 256. 17 4652. 04 5.59%
Interpretation: From the analysis it can be refer that, operating margin of Cipla is
23.78% which is very high than Sun pharmacy (2.9%) and Ranbaxy (5.59%). It shows that Cipla is earning more profit on its sale or I can say that Cipla is making more money before interest and taxes which indicates that it can easily pay for fixed costs, such as interest on debt and taxes. Whereas Sun pharmacy and Ranbaxy need to control over on their operating expenses so the operating margin can be raised.
Net Profit Margin:
This ratio shows the net earnings (to be distributed to both equity and preference shareholders) as a percentage of net sales. It measures the overall efficiency of production, administration, selling, financing, pricing and tax management. Jointly considered, the gross and net profit margin ratios provide an understanding of the cost and profit structure of a firm. Formula: Net profit Net Sales
CIPLA Net profit Net sales Net profit margin 776.81 5234.29 14.84%
SUN PHARMACY 1265.29 2774.65 45.6%
RANBAXY -1044.80 4652.04 -22.45%
Interpretation: The above table shows that Cipla has less net profit margin 14. 91%
than Sun pharmacy which is 31.05%. Which indicates that investment in Sun pharmacy is a better option for investor as it is yielding more profit to shareholders but when I compare net profit margin and operating profit margin of Sun pharmacy I found a huge difference in both which means that the contribution of other income ( revenue generating other than operating activities) is very high. Such a trend is usually inconsistent as major contributor to the revenue is operating activities. But still, Sun pharmacy would be in an advantageous position to survive in adverse economic condition i.e. fall in selling prices, declining demand for product etc.
company is maintaining its variable cost at appropriate levels but fixed needs very high level of improvement. 4) Return On Equity: 74 . 45% but if it is compared with operating profit margin we will get to know the major cause of losses are financing and investing activities or it can be said.Ranbaxy showing a negative net profit margin which shows Ranbaxy is bearing a loss of 22.
75 .29 5151. Ranbaxy is occurring losses on its owner’s fund so comparatively it is far behind from other two companies in fulfillment of the basic objective of a business.42 24.89% SUN PHARMACY 1265.75 17. to increase share holders return or it can be said that it is not a good option for investment.56% RANBAXY -1044.50% Interpretation: From the above table it can be determined that Sun pharmacy is more profitable company due to its high return on share holder’s equity. Because share holder are earning more money on their investment in Sun pharmacy.80 3541. Return on equity measures a corporation’s profitability by revealing how much profit a company generates with the money shareholders have invested.81 4350.11 -29.Return on equity means the amount of net income returned as a percentage of shareholders equity. Formula: Net Profit Net worth CIPLA Net Profit Net worth Return on equity 776.
INVESTMENT VALUATION RATIO: 76 .
which is only Rs. 13. share Dividend per share of SUN PHARMACY 284. 77 .1) Dividend Per Share: Dividend per share shows how much dividend is paid to shareholders on each dividend. It shows that investing in Sun pharmacy yield more money as dividend which is in share holder interest.00 420369753 Rs 0.75 per share RANBAXY 0.00 155. Formula: Total dividend paid to equity share holders No. 2 per share.46 equity 777291357 ~ Rs.79 207116391 Rs. of equity share outstanding CIPLA Dividend paid No. 2 per share Interpretation: By analysis it can determine that Sun pharmacy is paying Rs. 75 per share as comparison to Cipla. 13. Ranbaxy is not in position to pay dividend due to losses.
09 in comparison of Cipla which EPS is Rs 9.80 420369753 -24.85 on every equity share. Due to losses Ranbaxy is occurring losses of Rs.2) Earning Per Share: Earnings per Share are calculated to find out overall profitability of the organization. of equity share outstanding CIPLA Net profit after tax No.29 207116391 61.85 776. 81 777291357 9.9 Interpretation: it is shown that EPS is much higher of Sun pharmacy i. Formula: Net profit after tax and preference share dividend No. 79 .9. The higher EPS will attract more investors to acquire shares in the company as it indicates that the business is more profitable enough to pay the dividends in time. Rs 61.09 RANBAXY -1044.24. of equity shares EPS SUN PHARMACY 1265. EPS measures the profits available to the equity shareholders on each share held.e. Earnings per Share represent earning of the company whether or not dividends are declared.
4 crore for Sun pharmacy and Rs.09 0. 614.2 SUN PHARMACY 13. total retained earnings for yr 2008-09 can be calculated i.85 0. by multiplying this amount to total no.9. It shows the good future growth of the company.9 0.34 against Rs 7.e.225 RANBAXY 0.3) Dividend Payout Ratio: The payout ratio provides an idea of how well earnings support the dividend payments. Formula: Dividend per share Earning per share CIPLA Dividend per share Earning per share Dividend payout ratio 2 9. It shows that over all retained earnings of Sun pharmacy is also higher than Cipla which can be invested in new projects and research and development activities.06 crore for Cipla. 980. 81 .00 Interpretation: Cipla and Sun Pharmacy have approx equal payout ratio but if the retained earning per share is considered than Sun pharmacy retained higher earnings than Cipla i.75 61. So to buy share of Sun pharmacy will be more profitable.e. D/P ratio shows the percentage share of net profits after taxes and after preference dividend has been paid to the equity holders. Rs 47.00 -24. Rs. More mature companies tend to have a higher payout ratio. of shares of both companies.
23 18. 83 .77 468.18 Interpretation: From the interest coverage ratio of these companies it can be referred that Sun pharmacy has much higher interest coverage ratio than Cipla and Ranbaxy.25 SUN PHARMACY 1298. its ability to meet interest expenses may be questionable.DEBT COVERAGE RATIOS: 1) Interest Coverage Ratio: A ratio used to determine how easily a company can pay interest on outstanding debt. The lower the ratio.81 2.54 52. It shows that the company is not burdened by debt expenses because interest expenses are negligible which creates more profit for shareholders. Formula: EBIT Interest expenses CIPLA EBIT Interest expenses Interest coverage 953. When a company's interest coverage ratio is 1.83 10.94 145. the more the company is burdened by debt expense. An interest coverage ratio below 1 indicates the company is not generating sufficient revenues to satisfy interest expenses.8 RANBAXY 1485.5 or lower.
90 Interpretation: Here all the companies have strong inventory turnover which shows there strong sales.79 SUNPHARMACY 2833.82 than 3. Comparatively Sun pharmacy has more inventory turnover i. So it can be said that management efficiency of Sun pharmacy is better than Cipla and Ranbaxy.e.74 5.33 1398. 5.82 RANBAXY 4676. High inventory levels are unhealthy because they represent an investment with a rate of return of zero Formula: Sales Inventory CIPLA Sales Inventory Inventory turnover 5295.21 1198.79 of Cipla and Ranbaxy.65 486.5 3. 85 . High inventory turnover shows strong sales of company.32 3.MANAGEMENT EFFCIENCY RATIO: 1) Inventory Turnover Ratio: The ratio shows how many times a company’s inventory is sold and replaced over a period.
So a right conclusion on the basis of this ratio cannot be given.2 RANBAXY 4652.88 NOTE: Some companies' reports will only show sales .27 4. measuring how efficiently a firm uses its assets Formula: Net credit sales Average accounts receivable CIPLA Net credit sales Average receivable Receivable turnover 5234. I also took the net sales as net credit sales as the real value of net credit sales was not given in income statement of these companies. CONCLUSION: 87 . The receivables turnover ratio is an activity ratio.65 867.04 953.2) Receivable Turnover Ratio: It is an accounting measurement used to quantify a firm's effectiveness in extending credit as well as collecting debts.73 3.53 3.24 SUN PHARMACY 2774.29 1615.this can affect the ratio depending on the size of cash sales.
so it can easily borrow funds from different sources like bank and debenture bonds. interest coverage ratio.05 which shows it is more risky company than other two companies. which is available at cheaper rate to increase its R&D expenditure. which shows company is capable to pay returns to its owner by utilizing their funds. Debt-equity ratio is also very less so company can take step for business expansion by borrowing funds. net profit margin. It puts company at the lower end in investing decision of investors. Ranbaxy has a debt equity ratio of 1. Due to high gross profit margin. Creditors can also take decision in favor of sun pharmacy because debt-equity and interest coverage ratio of company shows its power to pay debt easily and timely. more money is available to spend on R&D activities but sill the net profit margin can be improved. etc. Due to which company is not able to pay dividend.On the basis of above financial statement analysis it can be said that. debt equity ratio. It is sufficient to pay dividend but in comparison to Sun Pharmacy dividend paid to shareholder is very less so investors may be less interested to invest in Cipla. So it can be a best choice for investor. It shows its strong fundamental. Return on equity. Net profit margin and return on equity is also very high in comparison of other two companies. maximum ratios are in favor of Sun pharmacy’s financial health i.e Current ratio. The company is using negligible debt to operate its business. 88 . Although debt is cheaper source of money but still high amount of debt increases outside obligations. quick raio. In pharmaceutical industry R&D expenditure of any company plays an important role in its growth because innovation of new drugs increases capabilities to compete with competitors. While Cipla is also having good amount of current assets over current liabilities which shows its ability to face situation og urgency. Difference of gross profit and net profit shows that company’s other activities than its core activities are major cause for losses.
PART-C KEY LEARNINGS 89 .
I learnt lots of aspects about corporate culture. Always they helped me when I was in need and I was always improved. at the same time co-operation skills also required. Team work plays a major role in success of an organization. how to implement my theoretical knowledge. which provide us a practical knowledge of corporate world. The entire staff was supportive and I was treated as an employee in organization. I learnt how an individual’s performance contributes in organization growth. practically while working in corporate culture. While working in research department of the company I learnt different process of the research on which a broking firm basically operates its business.On the completion of my summer internship programme I realize that summer internship programme is very important part for management studies. At last I can say that it was a great exposure for me and I enjoyed my work and learnt different things which will be helpful for me in near future and prove to the foundation of my success. One has to work with his full efficiency and dedication. Experience of my training was great at Globe Capital. BIBLIOGRAPHY 90 . It can be fundamental or technical or valuation method to forecast a firm’s future prospect that helps an individual investor in taking his investment decision. During my summer internship in Globe Capital Market Ltd. Through summer internship I could learn. One needs to be sincere during the work. One needs to complete the work assigned to him on time so the further process doesn’t get interrupted.
Perlitz Uwe.com 91 .in/indian-economy.pdf www. Agarawal Sanjay. (2008) Indian pharamaceutical industry on course for Globalization.fourstocks. KPMG Web Sites: www.com www.moneycontrol. (2006).tradingeconomics.nic.indiainbusiness.com www. Deutsche bank Research 2.com www.com http://www.nseindia. The Indian Pharmaceutical industry.Journals: 1.investopedia.
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