PROJECT ON FINANCIAL ANALYSIS OF CIPLA
INTRODUCTION OF PHARMACEUTICAL INDUSTRY:
The pharmaceutical industry includes companies involved in the manufacturing and development
of prescription drugs and over-the-counter products that are used to prevent illnesses in humans or
animals. The primary focus of the pharmaceutical industry are companies that develop brand
name drugs that have patent protection. Important factors relating to this industry will be the
development and analyzation of brand name drugs. The primary focus of this industry analysis
will be based on brand name drug manufacturing due to prevalence in the industry. Other factors
include the federal funding for, average age of consumers, number of patients with insurance,
continuation of research and development of the major pharmaceutical industries, and regulation
of brand name pharmaceutical manufacturing. India is the largest provider of generic drugs
globally. Indian pharmaceutical sector supplies over 50% of global demand for various vaccines,
40% of generic demand in the US and 25% of all medicine in the UK. India enjoys an important
position in the global pharmaceuticals sector. The country also has a large pool of scientists and
engineers with a potential to steer the industry ahead to greater heights.
Industry background: Although the industry is still quite profitable, the rise of generic drug
manufacturing has impacted sales of most brand name manufacturers. The low (R&D) needed to
create generic drugs that are often sold to consumers for much less than brand name drugs have
been preferred by most health insurances.
Industry lifecycle: The pharmaceutical industry is currently in the Mature stage. The value
added to the US economy is growing, but revenue growth is expected from specific therapeutic
classes in addition to trimming the workforce and consolidation of operations. The industry relies
on the advancement of medical technology to develop new drugs for unmet needs. However, the
rate of blockbuster drug development has decreased while the cost of R&D has increased.
Mergers and Acquisitions has been prevalent which has been a key indication for the indication of
a mature industry life cycle.
Growth of pharmaceutical industry in India: Medicine spending in India is projected
to grow 9 12% over the next five years, leading India to become one of the top 10 countries in
terms of medicine spending. Going forward, better growth in domestic sales would also depend
on the ability of companies to align their product portfolio towards chronic therapies for diseases
such as such as cardiovascular, anti-diabetes, anti-depressants and anti-cancers, which are on the
rise.
The Indian Government has taken many steps to reduce costs and bring down healthcare
expenses. Speedy introduction of generic drugs into the market has remained in focus and is
expected to benefit the Indian pharmaceutical companies. In addition, the thrust on rural health
programmes, lifesaving drugs and preventive vaccines also augurs well for the pharmaceutical
companies.
Introduction to CIPLA LTD
Cipla Limited is an Indian multinational pharmaceutical company headquartered in Mumbai,
India. Cipla primarily develops medicines to treat Respiratory, Cardiovascular disease,
Arthritis, Diabetes, Weight control, Depression and other medical conditions.
Industry: Pharmaceuticals.
Founded: 1935
Founder: Khwaja Abdul Hamied.
Headquarters: Mumbai, Maharashtra, India.
Area served: Worldwide
Products: Pharmaceuticals and diagnostics.
Operating income: ₹3,205.99 crore (2020)
Net income: ₹1,546.98 crore (2020)
Total assets: ₹23,662.56 crore (2020)
Total equity: ₹15,763.00 crore (2020)
Number of employees: 22,036
Revenue: ₹17,476.19 crore (2020)
Website: http://www.cipla.com/
Product and Services: Cipla sells active pharmaceutical ingredients to other manufacturers
as well as pharmaceutical and personal care products including Escitalopram (anti-depressant),
Lamivudine and Fluticasone propionate. They are the world's largest manufacturer of
antiretroviral drugs.
Operations: Cipla has 34 manufacturing units in 8 locations across India and a presence in
over 80 countries. Exports accounted for 48% ₹4,948 crore (equivalent to ₹68 billion or
US$950 million in 2019) of its revenue for FY 2013–14. Cipla spent INR 517 cr. (5.4% of
revenue) in FY 2013–14 on R&D activities. The primary focus areas for R&D were development
of new formulations, drug-delivery systems and APIs (active pharmaceutical ingredients). Cipla
also cooperates with other enterprises in areas such as consulting, commissioning, engineering,
project appraisal, quality control, know-how transfer, support, and plant supply.
Listing and Shareholding: The equity shares of Cipla are listed on the Bombay Stock
Exchange where it is a constituent of the BSE SENSEX index and the National Stock Exchange
of India where it is a constituent of the CNX Nifty. Its Global Depository Receipts (GDRs) are
listed on the Luxembourg Stock Exchange. As of 30 September 2014, the promoter group, Y. K.
Hamied and his family held around 36.80% equity shares in Cipla. Around 148,000 individual
shareholders held approx. 18.67% of its shares. LIC is the largest non-promoter shareholder
with approx. 6.45% shareholding in the company by the end of September 2013.
Shareholders (as on 31-March-2014)
Shareholding
Promoter Group
36.80%
Foreign Institutional Investors (FII)
23.32%
Individual shareholders
19.00%
Insurance companies
10.30
Private Corporate Bodies
04.68%
Mutual Funds and UTI
04.43%
NRI/FCB/Others
03.46%
GDRs
01.10%
Total
100.0%
Cipla Key Competitors
1. Sun Pharmaceutical Industries Ltd.
Sun Pharmaceutical Industries Limited is an Indian multinational pharmaceutical company
headquartered in Mumbai, Maharashtra that manufactures and sells pharmaceutical formulations
and active pharmaceutical ingredients primarily in India and the United States.
2. Lupin Limited
Lupin Limited is an Indian multinational pharmaceutical company based in Mumbai,
Maharashtra, India. It is one of the largest generic pharmaceutical companies by revenue
globally. The company's key focus areas include paediatrics, cardiovascular, anti-infectives,
diabetology, asthma and anti-tuberculosis.
3. Dr Reddy
Dr Reddy's Laboratories is an Indian multinational pharmaceutical company located in
Hyderabad, Telangana, India. The company was founded by Anji Reddy, who previously worked
in the mentor institute Indian Drugs and Pharmaceuticals Limited.
Financial evaluation of CIPLA’s business model
Cipla business model is driven by the One Cipla Credo and our purpose of Caring for Life. These
encourage and inspire our employees and partners to strive for excellence in what they do,
keeping ethics, transparency and good governance practices in mind. Cipla’s business model is
the foundation upon which we seek to effectively implement and drive a sustainable business
strategy.
Core aspects of Business model:
1. To build on the foundation of delivering quality and affordable products to patients, ensure that
each element of our value chain works seamlessly, harmonised with a sustainable and transparent
business conduct.
2. The six Capitals across the business model showcase the strategic allocation of resources to
generate operational synergies, capitalise on valued opportunities and contribute to efficacious
stakeholder value through distinguished outcomes.
3. The interlinkage and dependence between the Capital, what allows us to work in a co-operative
and harmonised environment, as One Cipla, addressing key stakeholder requirements and
challenges.
Our business model also encompasses key elements that drive operations, including the most
critical internal and external factors that influence Cipla.
These elements include the inspiration and ethos, the environment of operation, stakeholder’s
expectations, market opportunities and risks.
CHANGE IN BUSINESS MODEL:
In 2005 Indian government changed its law concerning patent drugs and fell in line with World
Trade Organization (WTO) Trade Related Intellectual Property Agreement (TRIPs) this limited
the production of certain drugs that was filed as a patent from January 1, 1995. the rate at which
ethical pharmaceutical companies come up with new blockbuster drugs is declining.
Most generic companies in India adapted to this setback in their business model by transferring
focus from domestic market in India and increase export of copy-cat drugs to Western Europe
and the United States, also entering into R&D agreements, mergers and acquisitions of foreign
drug companies and developing alliances with foreign pharmaceutical firms. CIPLA however
chose a slightly different approach than most generic pharmaceutical companies in India by
focusing on organic growth in India and only seldom indulging in strategic business alliances,
technological services (such as knowhow transfer, plant supply etc) and in licensing with big
pharmaceuticals. CIPLA however increased the exportation of generic drugs to countries like
United States and Western Europe.
External Analysis
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Strong R&D: Cipla has focused on developing new products as well as on improving drug
delivery systems and expanding product applications. Cipla has set up strong Research
and Development department for the same. The strong R&D facilities are well supported by
many manufacturing plants across the cities.
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The wide range of Products: Cipla has a broad product portfolio includes APIs and
formulations for humans and animal healthcare products. Cipla has over 2000 products in over
65 categories and is constantly looking for expansion of its product portfolio.
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Social and technological initiatives: Cipla provides and supports to cancer patients by
providing them low-cost medicines and it also initiated a “No touch Breast Scan” which is a step
forward to screening technology in India.
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Well recognised by various regulatory authorities: Cipla’s products are well recognised by
regulatory authorities of India, USA, Germany and the UK etc. this provides credibility to the
products of Cipla.
Internal analysis
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Strategy of the company: As part of the new strategy, Cipla intends to have front-end presence
in “key markets” including India, the US and South Africa. In other markets, it intends to return
to the old model of partnership.
Leveraging the front-end in the US market, the company plans to launch 10-15 products
Forecast of growth in the future
Self-reliance
OTC- It includes personal care products along with the artificial sweetener, infant food, etc.
Cipla also has a dedicated division for animal health-care products.
Prescription- It includes steroids, anti-allergic, anti-inflammatory, anti-asthma medicines etc.
Fragrance- It manufactures food and beverage flavours as well.
Active Pharmaceutical Ingredients- It is a leader in APIs which are cheaper and of high-quality.
Inhaled Products: More than 65 different inhaled products are sold by Cipla of more than 20
ingredients like Synchro breathe, multi-haler, nebulizer, nasal spray, rota haler, etc. Cipla was
the first company to manufacture oral iron in the world. Also, they are the world’s largest
manufacturer of antiretroviral drugs. Not only this, it provides services as well like
commissioning, plant engineering, etc.
Operations
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Cipla has 34 manufacturing units in 8 locations across India and a presence in over 80
countries. Exports accounted for 48% ₹4,948 crore (equivalent to ₹68 billion or US$950 million
in 2019) of its revenue for FY 2013–14. Cipla spent INR 517 cr. (5.4% of revenue) in FY 2013–
14 on R&D activities. The primary focus areas for R&D were development of new
formulations, drug-delivery systems and APIs (active pharmaceutical ingredients). Cipla also
cooperates with other enterprises in areas such as consulting, commissioning, engineering,
project appraisal, quality control, know-how transfer, support, and plant supply.
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As on 31 March 2013, the company had 22,036 employees (out of which 2,455 were women
(7.30%) and 23 were employees with disabilities (0.1%)). During the FY 2013–14, the company
incurred ₹1,285crore (equivalent to ₹17 billion or US$230 million in 2019) on employee benefit
expenses.
BALANCE SHEET OF CIPLA as at 31st march 2020
(Rs in Cr.)
No. of Months Year Ending
Mar-19
Mar-20
% Change
Net worth
15,012
15,763
5
Current Liabilities
3,771
4,393
16.5
Long-term Debt
3,830
2,369
-38.1
Total Liabilities
23,963
23,662
-1.3
Current assets
12,426
11,703
-5.8
Fixed Assets
10,519
10,742
2.1
Total Assets
23,963
23,662
-1.3
BALANCE SHEET ANALYSIS:
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The company's current liabilities during FY20 stood at Rs 44 crores as compared to Rs
38 crores in FY19, thereby witnessing an increase of 16.5%.
Long-term debt down at Rs 24 crores as compared to Rs 38 crores during FY19, a fall
of 38.1%.
Current assets fell 6% and stood at Rs 117 crores, while fixed assets rose 2% and
stood at Rs 107 crores in FY20.
Overall, the total assets and liabilities for FY20 stood at Rs 237 crores as against Rs
240 crores during FY19, thereby witnessing a fall of 1%.
Investment should be increased and different line or variety of goods sold.
Working Capital position is going down. To improve, it facilitates to customers should be
provided by the company.
INCOME STATEMENT OF CIPLA 2019-20
(Rs in Cr.)
No. of Months Year
Ending
Net Sales
Mar-19
Mar-20
% Change
15,971
16,694
4.50%
476
344
-27.80%
16,447
17,039
3.60%
Gross profit
3,097
3,206
3.50%
Depreciation
1,326
1,174
-11.40%
168
197
17.20%
2,079
2,178
4.80%
569
631
10.80%
1,492
1,499
0.50%
Gross profit margin
19.4
19.2
Effective tax rate
27.4
29
Net profit margin
9.1
8.8
Other income
Total Revenues
Interest
Profit before tax
Tax
Profit after tax
CIPLA Income Statement Analysis:
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Operating income during the year rose 4.5% on a YoY (Year over year) basis that can be much
higher if expense were controlled, which rose around Rs. 2500 crores this year.
The company's operating profit increased by 3.5% Year over year during the fiscal. Operating
profit margins witnessed a fall and stood at 19.2% in FY20 as against 19.4% in FY19.
Depreciation charges decreased by 11.4% even after acquiring more plant and equipment of
approximately Rs 11 crores which represent the good sign of finance management in Cipla and
finance costs increased by 17.2% Year over year, respectively.
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Other income declined by 27.8% Year over year.
Net profit for the year grew by 0.5% Year over year that cannot be ignored as there is a decline
which need to be managed as soon as possible. Due to the tax obligation that can be seen one of
the reasons that company should consider beforehand in-future along with other factors like
reducing expenses or increase in profit margins a bit in order to sustain the company in the long
run.
Net profit margins during the year declined from 9.1% in FY19 to 8.8% in FY20.
Nearly 40% of Cipla’s revenue from sale of products in 2020 is from India only. Thus, co. needs
to focus more on other countries like Europe along with India to increase sales and overall
incline in the revenue of Cipla.
FINANCIAL ANALYSIS OF CIPLA LTD
Financial Ratios
of Cipla with its
Peers
Margin Ratios
Gross Profit Margin
(%)
Operating Margin
(%)
Net Profit Margin
(%)
Return Ratios
Return on Net
worth / Equity (%)
Return on Capital
Employed or
Invested (%)
Pretax Margin (%)
Return On Assets
(%)
Liquidity Ratios
Current Ratio (X)
Quick Ratio (X)
Leverage Ratios
Debt to Equity (x)
CIPLA ltd.
Mar20
Mar19
20.72
Sun
Dr Reddys
Pharmaceutical Laboratories
Industries Ltd.
Ltd.
Lupin Ltd.
Benchmark
Mar20
Mar19
Mar20
Mar19
2020
2019
Mar-20
Mar-19
21.84
23.22
25.22
17.64
22.75
18.46
19.73
18.46
22.75
13.86
13.73
16.97
19.19
11
15.41
12.15
13.96
12.15
15.41
9.02
9.22
12.75
11.04
11.24
12.33
-1.78
4.17
11.24
11.04
9.81
10.17
8.31
6.43
12.98
13.9
-2.14
4.41
8.31
6.43
11.85
9.38
10.6
11.78
12.98
13.9
11.85
9.38
11.85
11.78
4.89
9.58
15.25
13.10
14.83
10.44
4.89
9.58
14.83
10.44
6.53
6.37
5.51
4.12
8.72
8.67
-1.07
2.17
5.51
4.12
2.66
1.67
3.29
2.24
2.02
1.51
1.79
1.34
1.75
1.26
1.88
1.31
1.67
1.3
2.26
1.63
1.75
1.3
1.88
1.34
0.18
0.29
0.17
0.24
0.11
0.24
0.34
0.6
0.17
0.24
Interest Coverage
Ratios (%)
Turnover Ratios
Asset Turnover
Ratio (%)
Inventory Turnover
Ratio (X)
Growth Ratios
3 Yr CAGR Sales
(%)
3 Yr CAGR Net
Profit (%)
12.04
13.34
18.41
10.05
19.61
26.78
5.15
6.77
18.41
10.05
72.4
68.28
48.11
44.92
75.42
68.76
61.53
52.46
61.53
52.46
3.91
4.13
4.17
3.69
5
4.6
4.45
3.82
4.45
3.82
5.98
5.87
1.6
0.67
7.26
-0.26
-3.98
1.24
1.6
0.67
14.06
2.66
-18.86
-17.22
16.15
-3.29
-45.94
-38.87
18.86
-17.22
LIQUIDITY RATIOS: Current Ratio: The company's current ratio downgraded and located at 2.66 through FY 20,
from 3.29 through FY 19. Current ratio satisfies the minimum required ratio that is 2:1 for better
safety precautions. However, current ratio decreased significantly in 2020 to around 2.66
showing a reduce in liquidity and ability to meet current obligations easily. Due to decrease in
current assets. The above table shows that CIPLA is doing a great job in comparison to other
companies. Cipla's latest year current ratio is 2.66 which is much higher than any other
company's current ratio of latest year. Also, CIPLA'S current ratio exceeds the industry median
of current ratio and right now has best position in industry. In terms of current ratio, Lupin Ltd.
has the lowest current ratio in industry and it also does not satisfy the minimum current required
ratio showing companies significant decrease in ability to meet current liabilities in case of
emergency.
Quick Ratio: The company's quick ratio also downgraded and located at 1.67 through FY 20,
from 2.24 through FY 19. Quick ratio has significantly decreased in 2020. Though, still it's more
than enough ensures that the company can meet current obligations easily. It shows that the
company still has sufficient amount of immediate fund to deal with its total liabilities in case of
any emergency. Current liabilities of the company are increased significantly compared to
previous year. There's also a decrease in total assets of the company this year. CIPLA also doing a
nice job in quick ratio as well. As it shows, an impressive quick ratio that is 1.67:1 which is also far ahead
from the median 1.3:1. However, Dr Reddy has the lowest quick ratio in comparison to all other
companies shown in the table. It's quick ratio in 1.26:1. Although, Dr Reddy still fulfil the minimum
required quick ratio that is 1:1 and can still meet Cipla's current obligations easily.
CASH CONVERSION CYCLE: Inventory Turnover Ratio:
In march 2020, the inventory turnover ratio (3.91) is low as compared to the inventory turnover
ratio IN march 2019 (4.13). But the percentage change of inventory turnover is only -5.32%.
The peer groups Sun Pharmaceutical Industries ltd., Lupin ltd., Dr Reddy laboratories Ltd. Has
more inventory turnover ratio i.e. 4.45 which is greater than the Cipla i.e. 3.91. The Inventory
Conversion Period of Cipla is 93 days and for peers it is 82 days. To improve the inventory
turnover Ratio of Cipla than other peer groups, it is important to look up at the sales
management. This can be done by increasing demand for products. A low inventory turnover
ratio indicates that the company has over investment in inventory, slow moving products, low
profits as compared to total investments. The Pharmaceutical industry is using the FIFO method
in inventory management. There is need to have proper inventory management in the
pharmaceutical industry as all have to improve their inventory turnover Ratio. The proper
demand forecasting needs to be done before setting up the production of medicines, so that stock
will be less. And inventory turnover ratio will increase.
Asset Turnover Ratio:
Asset turnover ratio is an efficiency ratio that predicts how efficiently a company use their
Assets to generate Revenue. And also, it is productivity ratio that shows how productive the
company generate the sales from the assets. It indicates how much sales is generated from every
assets. It measures the management ability to manage and use the company assets to generate
values in a company. Higher the turnover ratio, better the company is performing and generating
revenue from the use of assets. In March 2020, Asset Turnover Ratio is 72.40 % and for 2019 it
is 68.28 %. It can be interpreted that the asset turnover ratio is increasing as compared to the
previous year. And it leads to the increase in revenue from 16362 crore to 17131 crores.
The Peers of Cipla - Sun Pharmaceutical Industries ltd., Lupin ltd., Dr Reddys laboratories Ltd.
The Average Asset Turnover Ratio percentage of Peer companies for 2020 is 61.53 % and Cipla
is 72.4%. It shows that the Cipla is doing better than their peer companies to generate the
revenues by using the assets of the company. It shows that the management decisions over the
use of asset more efficiently leads to sales.
Cash Conversion Cycle:
In 2019-20, the Cash conversion cycle is 130 days and in 2018-19 it is 125 days, which is more
than the required cash conversion days. From the last six years the cash conversion period is
fluctuating but the change is very less in percentage. There is need to speed up the sales and
delivery cycles. Also, the need to analyze the cash flow of the company periodically, cash
receivables and cash payables.
The relationship between the company and suppliers and customers is relevant to have good cash
conversion cycle. The reduction of the inventory period that affect the effectiveness of the
company, which could reduce the costs involved and reflected positively on prices. Cipla can
reduce the inventory period to a minimum to retain the high turnover rate of inventory. If the
days sales outstanding will be low, then they have more days to pay the obligation to the
suppliers and their relationships will be maintained.
Leverage Ratios: A leverage ratio is any one of several financial measurements that assesses the ability of a
company to meet its financial obligations.
Debt to Equity (D/E) ratio: It compares a company’s total liabilities to its shareholder equity and
can be used to evaluate how much leverage a company is using.
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Higher leverage ratios tend to indicate a company or stock with higher risk to shareholders.
Cipla has neutral debt to equity ratio when compared with the average of other three companies
that are 0.17% and 0.18% in the year 2020.
Having a look in 2019, Cipla was on little bit on more debt than industry where the difference is
nearly 4%, but assuming Cipla was aware of this fact in the previous year that’s why it reduced
Cipla’s debt and approximately match with the industry.
Thus, no change is recommended and Cipla should follow the same pattern which is going well.
To sustain its daily operations Cipla has equitable distribution of debt and equity likewise other
three companies.
Interest Coverage Ratios (%): The interest coverage ratio is used to see how well a firm can
pay the interest on outstanding debt.
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Also called the times-interest-earned ratio, this ratio is used by creditors and prospective lenders
to assess the risk of lending capital to a firm.
A higher coverage ratio is better, although the ideal ratio may vary by industry.
Interest coverage ratio indicates Cipla is in an average position to pay its debt holders or its
financial obligations in comparison to its competitors, specially Sun Pharmaceutical Industries
Ltd. because this is the only one that goes along with the benchmark while others including Cipla
showed a decline. It also signals that, if this continues then in-future maybe Cipla take longer to
pay back to its creditors that can even lead to high level of bankruptcy risk on the part of Cipla.
So, Cipla should make a note that this would not repeat in future. Also, observe Sun Pharma how
they are managing all the stuff.
PROFITABILITY RATIOS: 
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PBDIT (Gross Margin Ratio): It expresses the relationship of gross profit to net sales and is
expressed in the terms of percentage. This ratio indicates the degree to which selling price of
goods per unit may decline without resulting in losses.
Cipla and its peers shows decline this year that indicates unfavourable purchasing and instability
of management to develop sales volume by making it impossible to buy goods in large volume.
PBIT (Operating Ratio): This ratio establishes a relationship between cost of goods sold plus
other operating expenses and net sales. This ratio ascertains the operational efficiency of the
management in their business operations
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Cipla’s operating ratio increases from11.00 in 2019 to 15.41 in 2020 while all other companies
show decline in both years. It interprets that higher the ratio less favourable it is because it would
leave a smaller margin to meet Interest, dividend and other corporate needs.
PBT (Profit Before Tax): this ratio is used to measure the operating efficiency of the company.
In the case of Cipla there is just minor change in the ratio which means Cipla is not be able to
turned the percentage of sales into profits. Also, Dr Reddy and Lupin shows decline this year.
But Sun Pharma became the market leader and shows the increase of 2.15% which shows
increase in the profitability of the firm.
Net Profit Margin: It shows the relationship between net profit after tax to sales. Higher the
ratio better will be the profitability.
Cipla’s net profit margin shows minor decline this year. Dr Reddy also shows decline whereas
on the other hand Sun Pharma shows a slight increase this year. Net profit ratio of Lupin shows
negative impact which is not good for the company.
Return on Capital Employed or Return on Invested Capital: This ratio is the most
appropriate indicator of the earning power of the capital employed in the business. Ideal ratio is
15%.
If the actual ratio is equal to or above 15% it indicates high productivity of the capital employed.
But in all the companies including Cipla it is less than 15% which indicates all companies have
less earning power of capital invested in business.
Return on Assets: The return on assets (ROA) shows the percentage of how profitable a
company's assets are in generating revenue. Return on assets gives an indication of the capital
intensity of the company, in case of Cipla with its Peers ROA shows increased from previous
years to this year but in case of Lupin The ratio is declined from 2.17 % to -1.07 % this year that
generally shows that Lupin conditions i.e. lower return on assets.
ROAs over 5% are generally considered good.
ROE=Net Income/Equity: The ROE of the Cipla Ltd declined or down at 9.02% in 2020 from
10.17in 2019 which is shown as there is not drastically change in the ROE of Cipla Ltd. Also, Its
Peers I.e. Dr Reddy, Lupin also shows decline But the ROE OF Sun Pharma increased from
previous year i.e. 11.04 to 12.75% this year. Which shows that Sun Pharma company’s Growth
rate is better than its peers. This Pharmaceutical industry is generating profits from its
Shareholders capital in the company.
PROFITABILITY ANALYSIS:
Every company has experienced a positive growth in revenue from 2019-2020.
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Operating income: Both Cipla and Sun Pharma shows a huge increase in operating income in
comparison of Dr Reddy and Lupin.
Revenue (increase), operating income (increase), growth (positive): company is at the growth
stage of life cycle.
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In terms of profitability, ROE shows a minor decrease this year but Sun Pharma shows highest
ROE with significant increase.
Sun Pharma is the market leader in pharmaceutical industry, whereas on the other hand, Lupin
suffers from the loss this year.
It is also can be observed that Cipla and Lupin focus more on shareholders.
CONCLUSION OF ANALYSIS:
To cut the long story short, the current assets and current liabilities of Cipla is low as compared
to previous years. The position is not growing so the efforts of the need to be held and it needs
investments for the company to sustain in the market. Although previous year there was
mismatch of debt but it handled the situation effectively and efficiently this year by balancing
between debt and equity along with the industry. The profit margin needs to be increased for the
growth of company. To increase the revenue of the company, Cipla should expand its business in
other countries. Moreover, Cipla is leading the market by standing on the 4th position in the
present times, providing cut-throat competition to its competitors.
GROUP 7
SIMRAN
2020982653
YAMINI
2020982636
SAMRIDHI
2020982630
TANUJ DHINGRA
2020982651
ATUL GAUR
2020982082
ARSHDEEP
2020982637
SHUBHANGI SHARMA
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