A

SYNOPSIS
ON

“A STUDY OF LEVERAGES OF CIPLA LIMITED”

(For the period of 2016 – 2019)

SUBMITTED TO

R.T.M. Nagpur University, Nagpur

In partial fulfillment of the requirement
for the award of degree of
Bachelor of Business Administration
Specialization in Financial Management
SUBMITTED BY
RITIK SHARAD PATEL

ENROLL. No. :- 20183025504897

UNDER THE GUIDANCE OF

PROF. REENU MEHTA
(MBA, NET- (Management, Commerce), M.Com)

VMV COMMERCE, ARTS, JJP SCIENCE COLLEGE, WARDHAMAN NAGAR,

NAGPUR – 08

2019-2020
 INDEX

CHAPTER NO. CHAPTER NAME PAGE NO.

Introduction
1  Introduction to Topic 1
 Company Profile

2 Objectives of the study 2

Research methodology
 Research Design
 Sampling Method
3  Scope and Limitations 5
 Method of Data Collection
 Primary Data
 Secondary Data

4 Data analysis & Interpretation 7

Conclusion, Suggestion &

5 8
Recommendation

Appendix
6 9
 Bibliography
 INTRODUCTION

The finanacial leverage may be defined as the tendency of residual net income to vary
disproportionatly with operating profit. It includes the change that takes place in the
taxable income as a result of change in the operating income. It signifies the existence of
fixed interest fixed dividend bearing securities in the total capital structure of the
company. Thus the use of fixed interest /dividend dealing securities are greater as
compared to the equity capital the leverage is said to be larger. In a reverse case the
leverage will be said to be smaller.

SIGNIFICANCE OF FINANCIAL LEVERAGE:-

Financial leverage helps the finance manager in designing the appropriate capital
structure. One of the objectives of planning an appropriate capital structure is to
maximize the return on equity shareholders funds or minimize the earning per share.

Financial leverage is double edged sword. On the one hand it increases financial
risk. A high financial leverage means high fixed financial costs and high financial risk
i.e. as the dept. component in capital structure increases, the financial risk also increase
i.e. risk of in solvency increases.
The finance manager therefore is required to trade off i.e. has to bring a balance
between risk and return for determining the appropriate amount of debt in capital
structure of a firm. Thus the analysis of financial leverage is most important tool in the
hands of finance managers who are engaged in financing the capital structure of
business firm, keeping in view the objectives of the firm.
 COMPANY PROFILE

Cipla Limited is an Indian multinational pharmaceutical and biotechnology company,

headquartered in Mumbai, India. Cipla primarily develops medicines to treat respiratory,
cardiovascular disease, arthritis, diabetes, weight control and depression; other medical
conditions.

It was founded by Khwaja Abdul Hamied as 'The Chemical, Industrial &

Pharmaceutical Laboratories' in 1935 in Mumbai. The name of the Company was changed to
'Cipla Limited' on 20 July 1984. In the year 1985, US FDA approved the company's bulk
drug manufacturing facilities. Led by the founder’s son Yusuf Hamied, a Cambridge-
educated chemist, the company provided generic AIDS and other drugs to treat poor people
in the developing world. In 1995, Cipla launched Deferiprone, the world’s first oral iron
chelator. In 2001, Cipla offered medicines (antiretrovirals) for HIV treatment at a fractional
cost (less than $350 per year per patient).

In 2013 Cipla acquired the South African company Cipla-Medpro, kept it as a

subsidiary, and changed its name to Cipla Medpro South Africa Limited. At the time of the
acquisition Cipla-Medpro had been a distribution partner for Cipla and was South Africa's
third biggest pharmaceutical company. The company had been founded in 2002 and was
known as Enaleni Pharmaceuticals Ltd. In 2005, Enaleni bought all the shares of Cipla-
Medpro, which had been a joint venture between Cipla and Medpro Pharmaceuticals, a South
African generics company, and in 2008 it changed its name to Cipla-Medpro.
 OBJECTIVES OF THE STUDY

 To analyze leverage of Cipla Ltd.

 To analyze the impact of leverages.
 To Study the Growth of Cipla Ltd.
.
 RESEARCH METHODOLOGY

Research methodology is an important tool in any research work. It acts as guideline

and road in completion of research. It is scientific search for data and information on as
particular topic research is search for knowledge.

Research design

Research design is a pre-planned sketch for the explanation of a problem. It is the first
step to take and the whole research. Study will conduct on the basis of this research design.
It gives us a due that how the further process would be taking place and how would be the
research study carry into classification, interpretation and suggestions. This is a guideline for
the whole work.

SAMPLING METHOD

Convenience sampling is used in exploratory research where the researcher is

interested in getting an inexpensive approximation of the truth. As the name implies, the
sample is selected because they are convenient. This non probability method is often used
during preliminary research efforts to get a gross estimate of the results, without incurring the
cost or time required to select a random sample.

LIMITATION

 Rate of inflation: if the rate o of inflation has changed in any of the periods under
review. This can mean that the numbers are not comparable across periods. For
example If the inflation rate was 100% in one year, sales would appear to have
doubled over the preceding year, when sales did not change at all.
 Aggregation : this information in financial statement line item that are using for a
ratio analysis may have been aggregated differently in the past, so that running the
ratio analysis on a trend line does not compare the same information through the
entire trend period.
 Area: the data taken of Cipla is only in India
DATA COLLECTION

1. PRIMARY DATA
2. SECONDARY DATA
A research plan was followed for gathering primary data, secondary data or both.

PRIMARY DATA

Primary data consisted of original information gathered for the specific purpose. Data
was collected from the primary sources i.e. questionnaire was developed with the help of
which personal interview were carried out. Also along with this I earned out personal
interviews with direct users like contractor and domestic users.

SECONDARY DATA

The secondary data are collected from Nagpur city Authorized dealer of, from
broachers, from website of the company, news papers, and magazines. Company.

DATA ANALYSIS & INTERPRETATION

Data will be analysed and interpreted on the basis of data collected.

CONCLUSION & SUGGESTION

Conclusion and suggestions will be drawn on the basis of data analysis and
interpretation.
 ANNEXURE

BIBLIOGRAPHY

BOOK

 Paul Bambrick – Santoyo, Leverage Leadership.

 Shawn Doyle –Jumpstart your Leadership, I0 JOLTS, To Leverage Your
Leadership.
 Robert S Kricheff – Leveraged Finance, Credit Analysis For Bonds and
Bank Debt.
 Sir William Maxwell, Mark Shenkman – Leveraged Financial Markets.
 Stephen J Antczak, Doughas J Lucas – Leveraged Finance.
 Karl Denninger, Charles Hugh Smith – LEVER-AGE.

WEB SITE
 www.ciplapharmaceutical.com
 www.googlebook.com
 www.wikipidia.com
 www.slideshare.co.in
 www.dmnews.com
 www.eventmarketer.com
 www.promomagazine.com
 www.marketingsherpa.com
 www.marketingprofs.com