Institute of Professional Education and Research PGDM-2009-11

Institute of professional education and research
PGDM-2009-11
WINTER PROJECT RESEARCH PROPOSAL
STUDY OF SECTOR PERFORMANCE-a case

STUDY
of
PHARMACEUTICAL SECTOR
Submitted to:- Submitted By:- 1

Dr. A.S. Khalsa Praveen Mayar
Acknowledgement
I would like to share the success of my project report amongst the person who have directly & indirectly
helped me to complete this project.
I consider myself fortunate enough to be in right place with person I take this opportunity to express my
deep sense of gratitude and hearty thanks to my guide Dr A.S. Khalsa for his valuable guidance &
support for the project.I am heartly thankful to him for providing me his able suggestions & remarks to
complete this project.I think without his guidance,this project is never been completed.
I would also be grateful to my professor Mr.Vaibhav lowalekar for his continuous help and
valuable discussions to bring clarity to the matter related to my project & guidance in all respect,who not
only provided me with the help I needed but also guided me in the right path which ultimately ends at
point of success.
At last but not the least,I would like to express my heartiest thanks to my faculty.Without their help &
support I am unable to complete the project.
Praveen Mayar
IPER PGDM
2
Contents
1. Chapter 1:- Overwiew of pharmaceutical sector………4
2. Chapter 2:- Research Methodology……………………9
3. Chapter 3:- Introduction to companies……………….11
4. Chapter 4:- Analysis of data………………………….26
5. Chapter 5:- Findings …………………………………40
6. Bibliography...................................................................41
3
Chapter 1:-
Overview of Indian
Pharmaceutical sector
4
Overview of pharma sector
Accounting for two percent of the world's pharmaceutical market, the Indian pharmaceutical sector
has an estimated market value of about US $8 billion. It's at 4th rank in terms of total pharmaceutical
production and 13th in terms of value. It is growing at an average rate of 7.2 % and is expected to grow to
US $ 12 billion by 2010.
Over the last two years the pharmaceutical market value has increased to about US $ 355 million because
of the launch of new products. According to an estimate, 3900 new generic products have been launched
in the past two years. These have been by and large launched by big brands in the pharma sector. And in
the year 2005 Indian pharmaceutical companies captured around 70% of the domestic market.
As in the present scenario, only a few people can afford costly drugs, which have increased price
sensitivity in the pharmaceutical market. Now the companies are trying to capture the market by
introducing high quality and low price medicines and drugs.With the Product Patent Act, which came
into action in January 2005, this industry is able to attract big MNCs to India. Earlier these big firms had
apprehensions in launching new drugs in the Indian market. At present, a large number of Indian
pharmaceuticals companies are looking for tie-ups with foreign firms for in-license drugs.
GlaxoSmithKline is among the top choices for the firms that wish to launch their product in India, but do
not have any branch over here.
Contract research and pharmaceutical outsourcing are the new avenues in the pharmaceutical market.
Contract manufacturing is growing at a very fast pace and is estimated to grow to US $30billion, whereas
contract research is estimated to reach US$6-10 billion.
The drugs and pharmaceuticals exported are worth over US$ 3.8 billion. India produces bulk drugs
related to various therapeutic areas. Indian pharmaceutical industry manufactures over 400 bulk drugs
and roughly 60,000 finished medicines used in different formulations.
India is emerging as a global leader in the area of outsourced clinical research and contract manufacturing
& research. Contract research is increasing at the rate of 25% per year, and is expectedto touch US $380
5
billion by 2010.The highly fragmented Indian pharmaceutical industry has around 30,000 players, out of
which 330 are in organized sector. Indian pharmaceutical industry exports its products to more than 200
countries, including highly regulated markets of Europe, Japan, USA and Australia. The Good
Manufacturing Practices (GMP) developed by the industry facilitates the production of different dosage
forms.
Indian Pharmaceutical sector:Economic value
The Indian pharmaceutical industry, which is now meeting over 95% of the country's pharmaceutical
needs, was almost non-existent before 1970. With the compound annual growth of 19.8% the industry
has grown from Rs.4 billion in 1970 to Rs.290 billion in 2003. The pharma sector has shown
tremendous growth over the years. About 250 Indian pharmaceutical companies hold 70% of the
market share with top players controlling about 7% of the market share. On 1st January 2005, the
Government of India issued patent ordinance according to which the Indian pharma companies can no
longer produce patented drugs. So now the companies have started exploring new business
opportunities, including contract research (drug discovery and clinical trials), co-marketing alliances
and contract manufacturing.A few years ago, investment in R&D was as low as 0.001% of the total
R&D worldwide, but now companies are focusing on drug discovery and R&D. They are spending over
5% of their turnover on R&D e.g. Wockhardt (8%), Cipla (4%), Cadila (4.45%).The value of Indian
Over-The-Counter Medicines (OTCs) market is over US$ 940 million and is growing at the rate of 20%
per year. There are about 61 US FDA approved plants in India, which will help Indian companies grab
the opportunity of contract manufacturing
.
Indian Pharmaceuticals: current scenario
According to the Economic Survey (2006-07), the pharmaceuticals industry had achieved a turnover
of about US$ 12 billion in 2005-06, and is expected to grow by 13% in 2007. Its pharma export value
reached about US$ 4.7 billion during 2005-06
.
Pharmaceutical industry accounts for about 2.91% of total FDI into the country. The FDI in
pharmaceutical sector is estimated to have touched US$ 172 million, thereby showing a compounded
annual growth rate of about 62.6%. Drugs and pharmaceuticals sector is at 8th rank in India's top 10
FDI attracting sectors.
According to the Economic Survey for the year 2006-07, the value of pharma output has increased ten
times over the last 15 years.From 50 billion in 1990 it has grown to Rs.550 billion (US$ 12 billion) in
2005-06. Driven by growing number of pharmaceutical units, increased knowledge skills, improved
quality and increasing national as well as international demand, India is now recognized as a leading
global pharma player.
Strong Domestic Growth

Drug sales to retail consumers in India grew by 9.8% to $6.98 billion (Rs.34,000 crore) in the
calendar year 2008, according to research firm ORG IMS Research, a joint venture of AC Nielsen
ORG-Marg and the U.K.-based IMS Health. The growth rate in 2008 was lower than 13.4%
6
registered in 2007, due to a dip in the second half of 2008. These figures are compiled from the data
collected from wholesalers and don’t include the drug sales through hospitals estimated at about $1.4
billion (Rs.7000 crore) per annum. After a decline of 1.2% in October 2008, the monthly retail drug
sales has improved significantly in the following months with the growth rate of 6.8% in November
2008, 13.3% in December 2008, 14.4% in January 2009 and 13.3% in February 2009, respectively.
The domestic market of Indian pharmaceutical industry is likely to register 12%-13% growth in 2009,
only marginally lower than the earlier projections of 15% as an impact of macroeconomic conditions,
according to ORG IMS Research. The impact of macroeconomic factors is much less on the Indian
companies compared to the global peers. In the next 4-5 years, this industry is expected to continue to
grow at more than 10% to touch the $30 billion mark by 2020. In the long term, the domestic
consumption is expected to keep growing at a healthy pace, because currently India’s healthcare
spending is only 5.6% of the country’s gross domestic product (GDP), which is among the lowest
globally.
The domestic consumption of drugs is bound to increase as the necessity of drugs will increase with
time and they will become more affordable for a larger population. The necessity will increase with
the rising population and lifestyle disorders making people more vulnerable to ailments such as
cardiovascular diseases and diabetes. Secondly, medicines will become more affordable to a larger
number of people as the size of India’s 300 million middle class is rapidly increasing and the income
levels are also going up.
Highly Fragmented
The domestic pharmaceutical market is quite fragmented with the top five companies commanding
only 22% market share. Cipla Ltd, has become the largest and the fastest growing company among
the top five companies, outclassing Ranbaxy Laboratories Ltd. Even the top 20 companies have a
total market share of about 57% only in contrast to the global drug market dominated by the 10 largest
companies that account for about 40% of global sales.
India’s Domestic Pharmaceutical Market (12 Months Ended January 2009)

Company Size ( $ Billion) Market Share (%) Growth Rate (%)
Total Pharma Market 6.9 100.0 9.9
Cipla .36 5.3 13.4
Ranbaxy .34 5.0 11.5
Glaxo Smithkline .29 4.3 -1.2
Piramal Healthcare .27 3.9 11.7
Zydus Cadila .24 3.6 6.8
Total of Top 5 1.53 22.1 --
Source: ORG IMS
WAY TO MOVE AHEAD 7

Though India is already established as a low-cost manufacturing base with significant technical and
manpower capability driving its growth, it is important to realize that 80% of the industry is still based
out of Europe and USA and they would continue to pose a challenge to India. Besides, China has also
been investing in building capability and will influence India’s standing in the medium long-term.
India is already one of the top players in the global generic pharmaceutical industry. In order to
sustain this position and stay ahead in the race, there is a need for constant investment in R&D. The
Indian domestic market is also steeply growing and hence pharmaceutical manufacturing in India may
have a better future than the present day scenario.
Pharmaceutical Industry in India is one of the largest and most advanced among the developing
countries. It provides employment to millions and ensures that essential drugs at affordable prices are
available to the vast population of India. Indian Pharmaceutical Industry has attained wide ranging
capabilities in the complex field of drug manufacture and technology. From simple pain killers to
sophisticated antibiotics and complex cardiac compounds, almost every type of drug is now made
indigenously.
Indian Pharma Industry is playing a key role in promoting and sustaining development in the vital
field of medicines. Around 70% of the country's demand for bulk drugs, drug intermediates,
pharmaceutical formulations, chemicals, tablets, capsules, orals and vaccines is met by Indian
pharmaceutical industry. A number of Indian pharmaceutical companies adhere to highest quality
standards and are approved by regulatory authorities in USA and UK.Indian Pharmaceutical sector is
highly fragmented with more than 20,000 registered units and is very top heavy. The leading 250
pharmaceutical companies control 70% of the market with market leader holding nearly 7% of the
market share. There are also 5 Central Public Sector Units that manufacture drugs. These units
produce complete range of pharmaceuticals, which include medicines ready for consumption by
patients and about 350 bulk drugs, i.e., chemicals having therapeutic value and used for production of
pharmaceutical formulations. India is largely self-sufficient in case of formulations. More than 85% of
the formulations produced in the country are sold in the domestic market. Some life saving, new
generation under-patent formulations are imported, by MNCs, which they market in India. Over 60%
of India's bulk drug production is exported. The balance is sold locally to other formulators.
Pharmaceutical Industry in India has been de-licensed and industrial licensing for most of the drugs
and pharmaceutical products has been done away with. Manufacturers are now free to produce any
drug duly approved by the Drug Control Authority. Indian pharmaceutical industry got a major boost
with the signing of General Agreement on Tariffs and Trade in January 2005 with which India began
recognising global patents. After recognizing the global patent regime the Indian pharma market
became a sought after destination for foreign players.
India holds the lion's share of the world's contract research business as activity in the pharma market
continues to explode in this region. Over 15 prominent contract research organisations (CROs) are
8
now operating in India attracted by her ability to offer efficient R&D on a low-cost basis. Thirty five
per cent of business is in the field of new drug discovery and the rest 65 per cent of business is in the
clinical trials arena. India offers a huge cost advantage in the clinical trials domain compared to
Western countries. The cost of hiring a chemist in India is one-fifth of the cost of hiring a chemist in
the West.
The future of Indian pharmaceutical sector looks extremely positive. Indian pharma companies are
vying for the branded generic drug space to register their global presence. Several Indian
pharmaceutical companies have acquired companies in the US and Europe and many others are
raising funds to do so. For example, Ranbaxy acquired Romania's Terapia, Ethimed NV of Belgium
and GSK's generic business Allen SpA in Italy. Dr Reddy's acquired German generic drug maker
Betapharm. Companies like Glenmark Pharma, Lupin, Aurobindo and Jubilant Organosys are on the
lookout for lucrative acquisitions.
Chapter:-2
Research Methodology
9
Objective :-
 To evaluate and analyze performance of pharmaceutical sector.
 To evaluate and compare performance of various companies in pharma sector .
Methodology :-
A sample of Eight Pharmaceutical companies is taken and performance analysis will be made up with
the help of financial analysis tool i.e. ratio analysis with the help of Analysis of variance:single factor
popularly known as ANNOVA.The period of study will be of five years i.e.(2004 -2009).
Comparision companies will be selected on the basis of there market specialization in order of Top down
approach.
Hypothesis:-
 Null hypothesis,if µ1=µ2=µ3……….µn
 Alternate hypothesis,if µ1≠µ2
Significance:-
 Study shows the performance of the companies.
 Future prospects within the sector can be known .
Limitations :- 10
Sample period and sample size are the limitations.
Chapter:-3
INTRODUCTION
11
IPCA LABORATORIES Ltd.
Website: www.ipca.co.in
Industry: Drug formulations
Industry P/E: 32.99
ROC Reg. No: 7837
Incorporation Year: 1949
Ownership: Ipca Laboratories Group
ISIN Code: INE571A01012
BSE Demat Code: 524494
BSE Listing: group B
NSE Scrip Code: IPCA LAB
Face value (Rs): 10.00
Beta: 0.56
Listed On: Bombay , Calcutta , National
Company background
Ipca Laboratories Ltd., originally promoted by a group of medical professionals and businessmen was
incorporated in the year 1949 as The Indian Pharmaceutical Combine Association Limited.
The main activity of the company is manufacturing drug formulations. It produces speciality
formulations like antimalaria, antiemetics, antibiotics and antihypertensives. It also produces medicines
in dosage forms like tablets, capsules, liquids and dry powders for suspension and injection (liquid &
dry). 12
The plants of the company are located in the Union territory of Dadra & Nagar Haveli at Athal and
Piparia in Silvasa, at kandla in Gujarat and at Ratlam and Indore in Madhya Pradesh. The company is
having a research centre at Mumbai which specialises in Active Pharmaceutical Ingredients (APIs), drug
intermediaries and formulation development. Ipca's APIs are well accepted throughout the world and is
currently exported to the regulated and non regulated markets in all major continents. It also
manufactures and supplies formulations for many leading companies in Europe. Fifty five percent of the
company's products are exported and it is also having operations in over 100 countries of the world.The
promoters of the company hold 52 percent of the equity shares and the Indian Public hold around 16
percent.
Ranbaxy Laboratories Ltd.
Website: www.ranbaxy.com
Industry Drug formulations
Industry P/E 32.99
ROC Reg. No. 3747
Incorporation Year 1961
Ownership Private (Foreign)
ISIN Code INE015A01028
BSE Demat Code 500359
BSE Listing group A
NSE Scrip Code RANBAXY
Face value (Rs) 5.00
Beta 0.68
Listed On Bombay , Luxembourg , Madras , National ,
Company Background
Incorporated in 1961, Ranbaxy Laboratories has emerged as one of India's
largest pharmaceutical companies. Its largest markets are USA, Europe and India. The US contributed
USD 379 million in sales in December 2006 while Europe chipped in USD 194 million. India's
contribution amounted to USD 275 million.
Ranbaxy manufactures and markets generic pharmaceuticals, value added generic pharmaceuticals,
13
branded generics, active pharmaceutical ingredients (API) and intermediates. It's product portfolio covers
the acute as well as the chronic businesses. The acute business comprises of anti--infectives, nutritionals,
gastro--intestinals and pain management. The chronic business consists of cardiovasculars,
dermatologicals and central nervous system. With a fast growing elderly population and an increase in
lifestyle related diseases, the chronic segment revenues are touted to overwhelm those of the acute
segment.
Ranbaxy's research division is involved in developing Novel Drug Delivery Systems (NDDS) and New
Drug Discovery Research (NDDR). Its NDDS research focuses on maximising the overall therapeutic
and commercial value of commonly prescribed pharmaceutical formulations. Its NDDR program deals
with developing new drugs for specific diseases like infectious, metabolic, inflammatory, respiratory
diseases and oncology. Ranbaxy's top ten molecules include:- Simvastatin, Amoxy+Clav Potas Com,
Amoxycillin, Ciprofloxacin, Isotretinon, Cephalexin, Ketorolac Tromethamine, Cefaclor, Clarithromycin
and Cefuroxime Axetil.
Ranbaxy has teamed up with GlaxoSmithkline to quicken the pace of its drug discovery program. A tie--
up with a leading university will see Ranbaxy dabble with medicinal herbs in an attempt to source
ingredients for its potential money spinning products.
Ranbaxy has set up manufacturing facilities in 11 countries across the globe viz Brazil, China, Ireland,
India, Japan, Malaysia, Nigeria, Romania, South Africa, USA and Vietnam. Its overseas facilities meet
the requirements of their respective local regulatory bodies. Its India operations are accredited by
international regulatory authorities like MCA--UK, FDA--USA and TGA Australia. Over the years, it has
added 11,000 employees across 49 countries around the world.
Ranbaxy has been at the forefront of the M \& A activity that has entranced the pharmaceutical industry.
It concluded nine M\&A deals amounting to nearly USD 450 million in December 2006. Terapia
(Romania), Ethimed (Belgium), Be--Tabs Pharmaceuticals (South Africa), Mundogen (Spain), Zanotech
Laboratories, Krebs Biochemicals \& Industries and Cardinal Drugs (India) and Senetek PLC have traded
their vestments for Ranbaxy's coutures.
14
Cipla Ltd.
Website: www.cipla.com
Industry P/E 32.99
ROC Reg. No. 2380
Ownership CIPLA Group
BSE Listing group A
NSE Scrip Code CIPLA
Beta 0.65
Listed On Bombay , Calcutta , National
Company Background
Cipla was set up in 1935 by Khwaja Abdul Hamied as The Chemical, Industrial & Pharmaceutical
Laboratories. Later, it came to be popularly known as Cipla.
15
Cipla manufactures and markets bulk drugs, prescription drugs, OTC products and veterinary products.
Cipla also offers different technological services for products and processes. Technical fees amounting to
Rs.76.5 crore contributed nearly two per cent of its total income in 2006--07.
Its bulk drugs and formulations products cover a wide range of therapeutic segments including arthritis,
asthma, allergic, antibiotics, oncology, diabetes, diarrhoels, epileptic, malaria, migraine, retrovirals,
cardiovascular, respiratory, etc.
In the veterinary segment, Cipla offers animal care products for aqua, equine, poultry, companion
animals and livestock animals.
Cipla provides a range of flavours and fragrances having a variety of applications in the foods &
beverages, bakery, confectionary, personal care, detergent products. It also produces pesticides.
The company owns around 30 manufacturing plants located across Bangalore (Karnataka), Vikhroli
(Maharashtra), Patalganga (Maharashtra), Kurkumbh (Maharashtra), Goa and Baddi (Himachal Pradesh).
The manufacturing facilities are approved by the major international regulatory agencies including the
US FDA, MHRA (UK) and WHO.
Cipla invested more than Rs.170 crore for a new export oriented unit (EOU) at Patalganga for APIs and
formulations, which started production in 2006--07. New EOU projects are underway at Bangalore and
Kurkumbh for the manufacture of APIs and at Sikkim for formulations. These are expected to be
completed by March 2008. The company is also in the process of setting up SEZ projects for the
manufacture of formulations in Indore (Madhya Pradesh) and Goa.Cipla conducts research for
developing innovative drug delivery systems for both new and existing drugs with major focus on new
medical devices in the area of respiratory medicine including an inhaler device for insulin. In addition to
its corporate office at Mumbai, research is conducted at almost all of its manufacturing facilities. The
company has an on--going research agreement with Avesthagen, Bangalore for collaborative
biopharmaceutical products to be marketed in and outside India. About 50 per cent of the company's
revenues accrues from exports. Cipla exports its products across 170 countries of USA, Latin America,
Europe, Middle East, Africa, Asia and Australia through strategic alliances with its partners. In the US
alone the company has alliances with nine companies including Teva Pharmaceuticals USA, Watson
Pharmaceuticals, Eon Labs, and Akorn for over 125 projects.
16
Torrent Pharmaceuticals Ltd.
Website: www.torrentpharma.com
Industry: Drug formulations
Industry P/E 32.99
ROC Reg. No. 2126
Ownership Torrent Group
BSE Listing group B
NSE Scrip Code TORNTPHARM
Beta 0.74
Listed On Bombay , Calcutta , Madras , National
Company background
Torrent Pharmaceuticals limited, promoted by Mr. U.N Mehta and owned by the Torrent Group was
incorporated in 1972. It was known as Trinity Laboratories at its nascent stage. Trinity was later
renamed as Torrent. The company is engaged in the manufacture of drugs, formulations and medical
electronic equipment. The registered office is situated in Ahmedabad, Gujarat.
17
The Baddi plant in Himachal Pradesh, has manufacturing capacities of 10 million litres per annum of
injection fluids and 5 tonnes per annum of Bulk drugs. The Indrad plant in Gujarat has capacities of
producing 5 tonnes per annum of Bulk drugs, 10 million litres per annum of injection fluids, 260 million
pieces of capsules and 5000 million pieces of tablets.
Torrent Pharma's products are in the segments of cardiovascular drugs (Dilzem, Listril, Nikoran etc),
central nervous system drugs (Azona, Lozapin, Respidon etc.), gastrointestinal drugs (Nexpro, Ranitin,
Veloz etc.), anti infective drugs (Droxyl, Moxif, Uroflox etc.), anti-diabetic drugs (Azulix, Eurepa,
Mitgor etc.) and pain management drugs (Diclofenac, Diclomax, Torcoxia etc.). The company also
manufactures Active Pharmaceutical Ingredients like Nicorandil, Venlafaxine Hydrochloride, Nebivolol
Hydrochloride etc.
It's active Research & Development Centre has collaborations with Novartis Pharma AG (Switzerland),
Astra Zeneca (Sweden and United Kingdom) and National Chemical Laboratory (Pune). Promoters own
almost three-fourth of the equity, while the institutional investors hold around 18 per cent. The Indian
public have nearly 7 per cent stake in the company.
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Dr. Reddy'S Laboratories Ltd.
Website: www.drreddys.com
Industry P/E 32.99
ROC Reg. No. 4507
Ownership Dr. Reddy's Group
BSE Listing group A
NSE Scrip Code DRREDDY
Beta 0.51
Listed On Bombay , Luxembourg , National , New York
Company Background
19
Dr. Reddy's Laboratories was established by Dr. Anji Reddy in 1984. It went public in 1986 and, in 1987,
it obtained United States Food and Drug Administration (USFDA) approval for its active pharmaceutical
ingredient (API) ibuprofen and started formulation operations. In 1988, it expanded its bulk actives
business by acquiring Benzex Labs. Dr. Reddy's is now a vertically integrated international
pharmaceutical company manufacturing and marketing APIs, generics and branded formulations.
The company manufactures more than 100 varieties of API and exports them worldwide. Principal
markets for API include North America, Europe, Middle East, South East Asia and India. The API
manufacturing operations are spread across six units in Andhra Pradesh with a total manufacturing
capacity of over 1,950 kilolitres.
Its branded formulations are classified into three sections: chronic (cardiovascular, diabetology, women's
health), acute (gastroenterology, anti-infectives, respiratory, pain management) and specialty (oncology,
dermatology, dental, urology and pediatrics). Formulation plants are located at Andhra Pradesh,
Pondicherry and Goa. The company's overseas plants are located in UK, USA and China.
Dr. Reddy's started generic business in 2001. This business focuses primarily on the north American and
EU markets. Dr. Reddy's has developed a biogeneric, Grafeel, which is a recombinant protein indicated
for chemotherapy-- induced neutropenia and in bone marrow transplantation. The company boasts a
biogeneric pipeline consisting of several recombinant proteins. The company also offers a service mix
covering the entire pharmaceutical value chain through its custom pharmaceutical services.
Its discovery research, conducted at Atlanta (USA) and Hyderabad (Andhra Pradesh), is focused towards
developing promising drugs in the key therapeutic areas of metabolic disorder, cardiovascular indications
and cancer. The company has six new chemical entities (NCEs) under various stages of clinical
development. Its NCE (discovery) pipeline of potential drug candidates includes three -- DRF 2593 for
diabetes, DRF 1042 for solid tumours and DRF 10945 for dislipidemia -- in phase II of development.The
company acquired API manufacturing site of Roche at Mexico in 2005 and Betapharm, the fourth largest
generics company in Germany, in 2006. During 2005--06, Dr. Reddy's promoted an integrated drug
development company, Perlecan Pharma Private Limited, together with Citigroup Venture Capital
International Growth Partnership Mauritius Limited and ICICI Venture Funds Management Company for
clinical development and out-licensing of New Chemical Entity (NCE).
The company plans to undertake capacity expansion of its Hyderabad and Vishkhapatnam facilities at an
estimated investment of Rs.450 crore. This includes setting up two greenfield plants for formulations.
Post expansion, the company will have a total capacity of 8 billion tablets per year by next year, which is
twice the current capacity. By 2009, it is looking to further double it to 16 billion tablets a year.
The company operates in 36 countries. Its key global brands are Omez (Omeprazole), Nise (Nimesulide),
Ciprolet (Ciprofloxacin), Enam (Enalapril), & Ketorol (Keterolac Tromethamine). It has wholly owned
subsidiaries in US, UK, Russia and Brazil, joint ventures in China and South Africa. It also has
20
partnerships with global pharmaceutical companies like Novartis, Novo Nordisk, Par Pharmaceuticals,
Leiner Healthcare, SkyePharma and Pliva.
Sun Pharmaceutical Inds. Ltd.
Website: www.sunpharma.com
Industry P/E 32.99
ROC Reg. No. 19050
Ownership Sun Pharmaceutical Group
BSE Listing group A
NSE Scrip Code SUNPHARMA
Beta 0.37
Listed On Bombay , National
Company Background
Sun Pharmaceuticals commenced operations in 1983 in two states namely -- West
Bengal and Bihar. It was listed on the Indian bourses in 1994. With a market capitalisation of Rs.22,467.8
crore on 18 February 2008, the company ranks first among the 239 listed drugs & pharmaceutical
companies.
The company manufactures formulations and active pharmaceutical ingredient's (API's) for both the
21
domestic as well as the international market. Almost 63.2 per cent of the company's formulation's gross
sales emanated from the domestic market in 2006--07. Exports of formulations and bulk accounted for
10.3 per cent and 18.5 per cent of gross sales respectively. USA is Sun's largest export market.APIs and
Dosage forms are made at eight sites across India. They are also produced across the world by the
company's subsidiaries. A substantial number of the company's facilities are approved by the US FDA
and the UK MHRA. The company has an Indian subsidiary, Sun Pharma Advanced Research Company,
an Indian affiliate -- Universal Enterprises, two partnership firms and eleven foreign subsidiaries.
Post-1996, the company and its subsidiaries adopted a series of organic as well as inorganic measures to
propel growth. Important acquisitions included the Detroit (US) based Caraco Pharm Labs, ICN Hungary
(now called Alkaloida Chemical Company Exclusive Group), and the internationally approved plants at
Halol (India) as well as Bryan, Ohio and Cranbury, in the US. On 21 May 2007, the company signed
definitive agreements to acquire Taro Pharmaceutical Industries Ltd., (TAROF, Pink Sheets), a
multinational manufacturing generic products across the U.S., Israel, Canada for USD 454 million. While
its has already acquired a 25 per cent stake in Taro, it still awaits Taro shareholder approval for the
process to be completed.
As per CMIE's capex service on 30 November 2007, the company had two projects under
implementation, namely the Jammu bulk drug expansion project (Rs.25 crore) and the Silvassa drug
formulation project (Rs.26 crore). The company proposed raising Rs.3,500 crore to fund its capex plans,
subject to its Taro acquisition being completed.The company has one of the highest R& D spends in the
country. It set up its first research center, Sun Pharma Advanced Research Center (SPARC) in 1993 in
Baroda, Gujarat -- India to develop generics that adhere to international development standards. The
laboratories at SPARC are equipped to carry out organic synthesis, develop formulations, biotechnology,
pharmacokinetics (studies that track the absorption, distribution, metabolism and excretion (ADME) )
and bioequivalence studies. It set up a second research center in Mumbai, spread over 50,000 sq ft of
floor area, to develop generics for the developed markets. It completed the demerger of its entire
innovative business comprising of research projects for new molecules and new delivery systems,
scientists, intellectual property, space & equipment and formed a new company -- Sun Pharma Advanced
Research Center (SPARC) which was listed on the bourses on 18 July 2007.
22
Glenmark Pharmaceuticals Ltd.
Website: www.glenmarkpharma.com
Industry P/E 32.99
ROC Reg. No. 19982
Ownership Glenmark Pharmaceuticals Group
BSE Listing group A
NSE Scrip Code GLENMARK
Beta 0.79
Listed On Bombay , National
Company Background
Mumbai based Glenmark Pharmaceuticals is an integrated pharmaceutical
company whose operations span the gamut of research, manufacturing and marketing of pharmaceuticals.
Incorporated in 1977 by Gracias Saldanha, the company was listed on the Indian bourses in 1999.
The formulations and bulk drug business contributed the major portion (78.5 per cent and 10.5 per cent,
respectively) of the company's revenues in 2006--07 with the remainder being income from licensing
deals for new chemical entities. The share of revenues from licensing deals increased from 3.5 per cent in
2005--06 to 11.1 per cent in 2006--07.
23
The company's formulations segment includes, dermatology, respiratory gynaecology, pain management,
diabetes, cardio-vascular, paediatrics, internal medicine etc. Apart from India, the company markets its
formulations in various countries in Asia, Africa, CIS/Russia, Latin America/Brazil and North America.
On 7 November 2007, the company announced its intention to reorganize its businesses into Specialty
and Generics. The new Generic entity will be called Glenmark Generics and will be a wholly owned
subsidiary of Glenmark Pharmaceuticals. It will house the development, manufacture and marketing of
generic formulation and API businesses.The parent -- Glenmark Pharmaceuticals will continue to manage
the novel R&D and branded formulation business of the Glenmark group including its operations in
India, Brazil, Rest of Latin America (excluding Argentina), Russia/CIS, Africa and Asia.
The company owns three formulation manufacturing plants in India. They are located at Goa, Nasik
(Maharashtra) and Baddi (Himachal Pradesh) . In 2004, Glenmark acquired a formulation facility located
at Sao Paolo, Brazil. In 2006--07, the company acquired Medicamenta -- a marketing and manufacturing
company in the Czech Republic.
The company acquired cGMP and WHO compliant API plant in Ankleshwar (Gujarat) from GSK in
2002 and obtained US FDA approval for it in 2004. The other API facilities are located at Kurkumbh and
Mohol (both in Maharashtra).
Glenmark's formulation development laboratory in Sinnar develops and enhances products for the
company's Indian, Latin American and semi--regulated markets. Its second formulations development
laboratory at Mahape (Navi Mumbai) develops products for the regulated markets of US and Europe.
Mahape also houses its research centre for the development of its New Chemical Entities (NCE)
programmes. As on 7 November 2007, it had 11 research programs namely six NCE's and five NBE's
(New biological entities) in various stages of development. The company's new chemical entity (NCE)
research is focused towards diabetes (type II), obesity, asthma and pain. Lead molecules (GRC 3886 --
Oglemilast, GRC 8200 and GRC 6211) are in Phase II of clinical trials.
Glenmark outlicensed its molecule Oglemilast (GRC 3886) to Forest Laboratories, for the North
American market. For Japanese market, Oglemilast has been outlicensed to Teijin Pharma. Glenmark
entered into an agreement with Germany based Merck KgaA to develop, register and commercialize
GRC 8200 for markets of North America, Europe and Japan. In 2007, Glenmark outlicensed its third
NCE under development--GRC 6211 for pain management to US drug major Eli Lilly. The deal size
could potentially workout to USD 350 million.
In 2006--07, Glenmark set up a biologic research centre in Switzerland through its wholly owned
subsidiary Glenmark Pharmaceuticals S.A. with main focus on oncology and inflammation. To identify
new biological entities at this centre, Glenmark tied up with US based Dyax in March 2007.
24
Novartis India Ltd.
Website: www.novartis.co.in
Industry P/E 32.99
ROC Reg. No. 6104
Ownership Private (Foreign)
BSE Listing group B
NSE Scrip Code
Beta 0.62
Listed On Bombay , Calcutta
25
Chapter:-4
DATA ANALYSIS
26
Cipla Ltd.
cipla
Quarter Ltd.
2004-09 EY(%) DY DPS EPS
Q1 0.94 10.87
Q2 1.01 0.83 3 11.74
Q3 0.95 13.42
Q4 1.18 13.66
Q5 0.96 14.62
Q6 0.92 0.89 3.5 15.52
Q7 0.79 15.52
Q8 0.53 20.26
Q9 0.65 8.48
Q10 0.76 1.59 2 8.48
Q11 0.8 9.22
Q12 0.85 9.34
Q13 0.96 8.59
Q14 1.1 1 2 7.85
Q15 0.94 8.32
Q16 0.91 9.02
Q17 0.95 9.27
Q18 0.88 0.93 2 8.77
Q19 1.07 8.93
Q20 0.91 9.99
Q21 0.79 11.19
Q22 0.71 0.73 2 12.38
27
Dr.Reddy laboratories Ltd.
Dr. reddy
laboratories
Quarter Ltd.
2004-09 EY% DY DPS EPS
Q1 0.68 0.56 5 26.8
Q2 0.68 18.23
Q3 0.58 12.99
Q4 0.68 11.69
Q5 0.66 0.75 3.75 14.65
Q6 0.59 23.61
Q7 0.51 23.61
Q8 0.35 29.81
Q9 0.39 0.37 5 35.11
Q10 0.34 17.54
Q11 0.31 25.89
Q12 0.34 53.79
Q13 0.38 0.75 3.75 72.84
Q14 0.58 73.64
Q15 0.51 36.26
Q16 0.63 29.05
Q17 0.56 0.59 3.75 34.9
Q18 0.74 32.86
Q19 0.8 36.5
Q20 0.77 33.29
Q21 0.48 0.63 6.25 34.29
Q22 0.63 40.55
28
Glenmark Pharmaceuticals
Glenmark
Quarter pharmaceuticals
Q1 0.96 8.08
Q2 0.41 0.73 0 10.54
Q3 0.27 10.77
Q4 0.23 5.35
Q5 0.26 0 0.7 5.19
Q6 0.22 0.23 0 3.91
Q7 0.22 3.91
Q8 0.45 0.23 0.7 5.39
Q9 0.23 5.03
Q10 0.22 5.03
Q11 0.12 0.11 0.8 6.17
Q12 0.13 7.12
Q13 0.12 9.64
Q14 0.09 6.35
Q15 0.19 0.08 0.7 12.47
Q16 0.14 14.24
Q17 0.11 14.33
Q18 0.14 14.46
Q19 0 10.07
Q20 0 0 0.4 8.71
Q21 0 6.63
Q22 0.17 5.63
29
Ipca laboratories
Ipca
laboratories
Quarter Ltd.
Q1 2.44 2.58 6 61.16
Q2 1.7 3.54 0 63.84
Q3 1.22 1.49 5 66.16
Q4 1.83 3.08 3 30.89
Q5 1.53 34.84
Q6 1.24 32.69
Q7 1.34 1.89 2.5 32.69
Q8 1.58 25.58
Q9 2.11 1.91 3 24.02
Q10 1.49 24.02
Q11 1.09 1.29 3.5 30.3
Q12 1.08 44.06
Q13 0.89 1.04 4 48.56
Q14 1.14 52.71
Q15 1.11 1.2 3.5 58.25
Q16 1.23 56.25
Q17 1.33 1.2 4.5 51.83
Q18 1.43 48.28
Q19 2.32 2.09 4 42.09
Q20 3.5 2.52 3 40.58
Q21 2.21 2.36 4 51.1
Q22 1.38 62.13
30
Novartis India Ltd.
Novartis
India
Quarter Ltd.
Q1 1.78 2 10 26.37
Q2 1.71 29.4
Q3 1.47 21.01
Q4 2.01 16.08
Q5 2 2.04 10 20.41
Q6 1.92 14.2
Q7 1.7 14.2
Q8 1.7 33.07
Q9 2.31 7.07 15 21.17
Q10 3.24 21.17
Q11 4.23 26.9
Q12 7.97 4.73 10 26.26
Q13 6.56 7.74 0 25.39
Q14 3.09 25.58
Q15 2.4 28.72
Q16 0 27.56
Q17 0 31.46
Q18 3.8 31.08
Q19 3.64 33.47
Q20 2.76 32.45
Q21 2.36 0 10 33.78
Q22 1.88 34.72
31
Ranbaxy Laboratories Ltd.
Ranbaxy
laboratories
Quarter Ltd
Q1 1.87 33.4
Q2 1.56 30.5
Q3 1.36 1.58 5 28.43
Q4 1.69 25.07
Q5 1.61 1.85 12 19.22
Q6 1.73 4.6
Q7 2.35 2.18 2.5 4.59
Q8 1.97 4.8
Q9 2.38 1.77 6 5.43
Q10 1.93 5.43
Q11 2.17 2.07 2.5 9.26
Q12 2.41 2.46 6 10.21
Q13 2.39 11.87
Q14 1.96 16.99
Q15 2 2.01 2.5 15.6
Q16 1.94 1.94 6 13.26
Q17 1.63 5.97
Q18 3.43 -12.24
Q19 2.38 -38.52
Q20 3.62 -48.16
Q21 0 -32.74
Q22 0 -15.21
32
Sun pharmaceutical Inds Ltd.
sun
pharmaceutical
Quarter Inds Ltd.
Q1 0.68 16.13
Q2 0 16.67
Q3 0.59 0 3.25 17.06
Q4 0.69 16.48
Q5 0.56 19.35
Q6 1.05 0.52 3.75 21.37
Q7 0.55 21.37
Q8 0.43 24.84
Q9 0.47 0.49 5.5 26.11
Q10 0.59 26.03
Q11 0.56 28.01
Q12 1.16 0.56 6.75 30.6
Q13 1.2 1.21 0 31.91
Q14 0.7 35.46
Q15 0.55 45.76
Q16 0 48.96
Q17 0 0 10.5 51.63
Q18 0.72 56.86
Q19 0.99 52.55
Q20 0.94 61.09
Q21 0.96 0.87 13.75 53.4
Q22 0.98 48.57
33
Torrent Pharmaceuticals Ltd.
Torrent
pharmaceuticals
Quarter Ltd.
Q1 2.54 0 8 32.34
Q2 1.75 32.92
Q3 1.39 26.98
Q4 1.82 25.02
Q5 1.61 1.7 8 27.49
Q6 1.38 28.13
Q7 0.95 28.13
Q8 0.92 8.38
Q9 1.28 1.7 2.5 7.46
Q10 1.38 7.46
Q11 1.19 7.43
Q12 2.79 1.3 3 8.84
Q13 1.16 13.35
Q14 1.59 13.08
Q15 1.49 18.47
Q16 0 18.38
Q17 2.19 0 3.5 18.65
Q18 2.1 19.48
Q19 2.55 20.73
Q20 2.61 23.1
Q21 2.23 2.33 4 25.42
Q22 1.27 29.68
ANNOVA:-Single factor(EPS)
34
Anova: Single Factor(EPS)

SUMMARY
Groups Count Sum Average Variance

Cipla 22 245.44 11.15636 10.15909

Dr. reddy laboratories 22 717.9 32.63182 271.3002

Glenmark pharmaceuticals 22 179.02 8.137273 11.86106

Ipca laboratories 22 982.03 44.63773 187.1939

Novartis india Lid. 22 574.45 26.11136 40.09275

ranbaxy laboratories 22 97.76 4.443636 470.1161

Sun pharmaceutical 22 750.21 34.10045 232.0354

Torrent pharmaceutical 22 440.92 20.04182 73.61167

ANOVA
Source of Variation SS Df MS F P-value F crit
8.53E-
Between Groups 30958.13 7 4422.589 27.29214 25 2.06446
Within Groups 27223.78 168 162.0463

Total 58181.9 175
35
ANNOVA:-Single factor(Earning yield)
Anova: Single Factor(EY%)

SUMMARY
Cipla 22 19.56 0.889091 0.022142
Glenmark
pharmaceuticals 22 4.68 0.212727 0.040868

Ipca laboratories 22 35.19 1.599545 0.364833

Novartis india Lid. 22 58.53 2.660455 3.335424

ranbaxy laboratories 22 42.38 1.926364 0.685691



ANOVA
Source of Variation SS df MS F
P-value
2.75E- 36
F crit
Between Groups 104.9238 7 14.98911 23.79096 22 2.06446

Within Groups 105.8457 168 0.630034

Total 210.7694 175
ANNOVA:-Single factor(DPS)
Anova: Single Factor(DPS)

SUMMARY
Varianc
Groups Count Sum Average e
2.41666 0.44166
Cipla 6 14.5 7 7
4.58333 1.04166
Dr. reddy laboratories 6 27.5 3 7
0.47142 0.11904
Glenmark pharmaceuticals 7 3.3 9 8
3.53846 2.01923
Ipca laboratories 13 46 2 1
9.16666 24.1666
Novartis india Lid. 6 55 7 7
9.99553
ranbaxy laboratories 8 42.5 5.3125 6
Sun pharmaceutical 7 43.5

6.21428
6
4.83333
21.5714
3
6.26666
37
Torrent pharmaceutical 6 29 3 7

ANOVA
Source of Variation SS df MS F P-value F crit
308.595 38.5744 5.02368 0.00013 2.12992
Between Groups 3 8 1 2 2 3
383.925 7.67851
Within Groups 7 50 4

Total 692.521 58
ANNOVA:-Single factor(Dividend yield DY)
Anova: Single Factor(DY)

SUMMARY
Cipla 6 5.97 0.995 0.09335
Glenmark pharmaceuticals 7 1.38 0.197143 0.06419
Ipca laboratories
Novartis india Lid.
ranbaxy laboratories
13
6
8
26.19
23.53
15.86
2.014615
3.921667
1.9825
0.605477
9.489137
0.071707

38

ANOVA
P-
Source of Variation SS df MS F value F crit
65.9986 2.27E-
Between Groups 4 7 9.428377 7.759442 06 2.195337
Within Groups 61.9693 51 1.215084

127.967
Total 9 58
39
Chapter:-5
FINDINGS
40
Findings
As far as the data is concern,If we see the ANNOVA:single factor of EPS,EY,DPS and DY we clearly
seen that the value of critical F is less than F with less value of P so it is clear that null hypothesis is
rejected and alternate hypothesis is accepted.
So from the above research its is clear that investment according to the sector is a business of loss,so
investment according to the company in the particular sector is preferable.
41
BIBLIOGRAPHY
42
Books Reference
 Ramachandran & Kakani. 2008. Financial Accounting for Management. Tata McGraw-Hill
Publishing company Ltd. 2 nd Ed.
 Mukherjee, A. 2008. Modern Accountancy . Tata McGraw-Hill Publishing company Ltd.
2nd Ed.
 William. Financial and Managerial Accounting. Tata McGraw-Hill Publishing company Ltd.
 Balwani, N. 2006. Accounting and Finance for Managers. Excel Books, New Delhi.
 Panditkumar, M.P. 2008. Management Accounting - Theory and Practice. Excel Books,
New Delhi.
 Goyal, V.K. Financial Accounting. Excel Books, New Delhi.
 Kuppapally. 2008. Accounting for Managers. PHI Learning Private Limited.
 Kaplan, Robert & Atkinson. 2007. Advanced Management Accounting. PHI Learning
Private Limited.. 3 rd Ed.
 Banerjee, B.K. 2008. Financial Accounting – A dynamic approach. PHI Learning Private
 Limited.
 Needles, Powers. 2008. Financial Accounting. Wiley India Pvt Ltd.
 Jones, M. 2005. Accounting for Non specialists. Wiley India Pvt Ltd.
 Shah, P.P. 2008. Financial Management . Wiley India Pvt Ltd.
 Anthony, Hawkins & Merchant. 2008. Accounting: Text and Cases Tata McGraw-Hill
Publishing company Ltd. 12 th Ed.
 Maheshwari & Maheshwari. 2009. Financial Accounting. Vikas Publishing House Pvt Ltd.
4TH ED.
Websites
 www.naukrihub.com
 www.theindusview.com
 www.expresspharmaonline.com
Database
 Prowess
 Business beacon
43

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WINTER PROJECT RESEARCH PROPOSAL

STUDY OF SECTOR PERFORMANCE-a case

Submitted to:- Submitted By:- 1

1. Chapter 1:- Overwiew of pharmaceutical sector………4

2. Chapter 2:- Research Methodology……………………9

3. Chapter 3:- Introduction to companies……………….11

4. Chapter 4:- Analysis of data………………………….26

5. Chapter 5:- Findings …………………………………40

Strong Domestic Growth

India’s Domestic Pharmaceutical Market (12 Months Ended January 2009)

WAY TO MOVE AHEAD 7

Industry: Drug formulations

Industry P/E: 32.99

ROC Reg. No: 7837

Incorporation Year: 1949

Ownership: Ipca Laboratories Group

ISIN Code: INE571A01012

BSE Demat Code: 524494

BSE Listing: group B

NSE Scrip Code: IPCA LAB

Face value (Rs): 10.00

Listed On: Bombay , Calcutta , National

Ranbaxy Laboratories Ltd.

Industry Drug formulations

Industry P/E 32.99

ROC Reg. No. 3747

Incorporation Year 1961

Ownership Private (Foreign)

ISIN Code INE015A01028

BSE Demat Code 500359

BSE Listing group A

NSE Scrip Code RANBAXY

Face value (Rs) 5.00

Listed On Bombay , Luxembourg , Madras , National ,

Industry Drug formulations

Industry P/E 32.99

ROC Reg. No. 2380

Incorporation Year 1935

Ownership CIPLA Group

ISIN Code INE059A01026

BSE Demat Code 500087

BSE Listing group A

NSE Scrip Code CIPLA

Face value (Rs) 2.00

Listed On Bombay , Calcutta , National

Industry: Drug formulations

Industry P/E 32.99

ROC Reg. No. 2126

Incorporation Year 1972

Ownership Torrent Group

ISIN Code INE685A01028

BSE Demat Code 500420

BSE Listing group B

NSE Scrip Code TORNTPHARM

Face value (Rs) 5.00

Listed On Bombay , Calcutta , Madras , National

Industry Drug formulations

Industry P/E 32.99

ROC Reg. No. 4507

Incorporation Year 1984

Ownership Dr. Reddy's Group

ISIN Code INE089A01023