... * Company Profiles (10 Companies) * Financial Ratio Analysis * DCF Valuation * Valuation Shares 8) Conclusion 74 9) Bibliography 76 RESEARCH OBJECTIVES Research Project Topic: “Analysis and Valuation of the Indian Pharma Sector” The research objectives of this specialization project are: 1) Identifying the key indicators of the Global Pharma Industry 2) Understand and analyze the Indian Pharma Industry and identify the prominent players. 3) To examine the trends in the pharma industry 4) Fundamental and Technical Analyses of the Top 10 pharma companies in India. The main objective of this study is: 1) Valuation of the Top 10 Pharma companies 2) Finding the correct share price of the company 3) Making investment decision of- Buying, Selling or Holding the stocks of the respective pharma company. EXECUTIVE SUMMARY * Global Pharma Industry is likely to grow at a CAGR of 5% to US $ 1...
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...Investment Valuation Assignment On Altman’s Z-Score Submitted By: A Sreekanth Vidyasagar Garvit Sharma A Dixit Altman Z-score The Z-score formula for predicting bankruptcy was published in 1968 by Edward I. Altman, who was, at the time, an Assistant Professor of Finance at New York University. The formula may be used to predict the probability that a firm will go into bankruptcy within two years. Z-scores are used to predict corporate defaults and an easy-to-calculate control measure for the financial distress status of companies in academic studies. The Z-score uses multiple corporate income and balance sheet values to measure the financial health of a company. Z score bankruptcy model: Z = 1.2X1 + 1.4X2 + 3.3X3 + 0.6X4 + .999X5 Explanation X1: The Working Capital/Total Assets (WC/TA) ratio is a measure of the net liquid assets of the firm relative to the total capitalization. Working capital is defined as the difference between current assets and current liabilities. Ordinarily, a firm experiencing consistent operating losses will have shrinking current assets in relation to total assets. Altman found this one proved to be the most valuable liquidity ratio comparing with the current ratio and the quick ratio. This is however the least significant of the five factors....
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...The sector overview and Major players The Indian Pharmaceutical industry is highly fragmented with about 24,000 players (around 330 in the organised sector). The top ten companies make up for more than a third of the market. The Indian pharma industry (IPM) grew by 16% YoY in 2012 to ` 629 bn. It accounts for about 1.4% of the world's pharma industry in value terms and 10% in volume terms. Besides the domestic market, Indian pharma companies also have a large chunk of their revenues coming from exports. While some are focusing on the generics market in the US, Europe and semi-regulated markets, others are focusing on custom manufacturing for innovator companies. Biopharmaceuticals is also increasingly becoming an area of interest given the complexity in manufacture and limited competition. The drug price control order (DPCO) continues to be a menace for the industry. There are three tiers of regulations – on bulk drugs, on formulations and on overall profitability. This has made the profitability of the sector susceptible to the whims and fancies of the pricing authority. In connotation, with pricing policy of 354 drugs, NLEM (National list of essential medicines) was released, which covered the list of the drugs which the authority intends to put under price control. The policy has been stiffly opposed by the pharmaceutical industry. Introduction of GDUFA (Generic drug user fee Act) in US. As per this act, the generic companies are required to pay user fees to USFDA, for...
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...patenting, testing and ensuring safety and efficacy and marketing of drugs. Indian Pharmaceutical Industry The pharmaceutical industry in India is among the most highly organized sectors. This industry plays an important role in promoting and sustaining development in the field of global medicine. Due to the presence of low cost manufacturing facilities, educated and skilled manpower and cheap labor force among others, the industry is set to scale new heights in the fields of production, development, manufacturing and research. In 2008, the domestic pharma market in India was expected to be US$ 10.76 billion and this is likely to increase at a compound annual growth rate of 9.9 per cent until 2010 and subsequently at 9.5 per cent till the year 2015. | Industry Trends : * The pharma industry generally grows at about 1.5-1.6 times the Gross Domestic Product growth * Globally, India ranks third in terms of manufacturing pharma products by volume * The Indian pharmaceutical industry is expected to grow at a rate of 9.9 % till 2010 and after that 9.5 % till 2015 * In 2007-08, India exported drugs worth US$7.2 billion in to the US and Europe followed by Central and Eastern Europe, Africa and Latin America * The Indian vaccine market which was worth US$665 million in 2007-08 is growing at a rate of more than 20% * The retail pharmaceutical market in India is expected to cross US$ 12-13 billion by 2012 * The Indian drug and pharmaceuticals segment received...
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...those who import raw materials heavily. Automobiles, capital goods, petroleum, power and telecom companies will bear the brunt of a weak rupee. But, sectors such as software services and pharma, with major export revenues, will benefit, though the extent of gains at the net profit level will hinge greatly on their foreign exchange hedging policies. Ads by Google • New Launch Villa Project3.5 & 5.5 BHK Luxury Villas in Pune Your island of Peace 2.5cr onwards Gera.in/Isle_Royale_Villas_Bavdhan • HDFC Life™ Term PlanPremium Starts@Just रु 2000/yr. No Medicals upto 75L Cover* Buy Now www.buyhdfcslonline.com The ET Intelligence Group analysed the impact of a weak currency on select sectors. Pharma: Most companies in the sector will gain from the rupee's fall, since a substantial proportion of their revenues comes from exports. A strong US dollar and yen will boost net sales and operating margins. Gainers: The major gainers will be Dr Reddy's Lab, Sun Pharma, Lupin, Glenmark, Wockhardt and Cadilla Healthcare as they derive significant earnings from overseas markets. Analysts reckon that with every Rs 1 movement, the earning per share of these companies will change by 1-2%. For Cipla, which focuses mostly on the domestic market, rupee's fall could be largely neutral. Aurobindo Pharma and Jubilant Lifescience may not gain much since they have huge foreign borrowings of up to $600 million (about Rs 3,600 crore). Software: The operating margins of software service exporters...
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...Pharmaceutical Cluster in Andhra Pradesh Microeconomics of Competitiveness Final Project Harvard Business School Helene Herve | Lhakpa Bhuti | Saurabh Agarwal | Sonny Kushwaha | Akbar Causer May 2013 Table of Contents 1 2 Executive Summary ............................................................................................................................ 3 Introduction to India ........................................................................................................................... 4 2.1 2.2 History and Political Climate ....................................................................................................... 5 Competitive Positioning of India ................................................................................................. 6 Endowments .......................................................................................................................... 6 Economic Performance To-Date and Macroeconomic Policy.............................................. 7 Summary of Export Clusters ................................................................................................. 9 Social Infrastructure and Political Institutions.................................................................... 10 India Diamond .................................................................................................................... 11 2.2.1 2.2.2 2.2.3 2.2.4 2.2.5 3 3.1 Andhra Pradesh .............................
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...Top 10 Pharmaceuticals in India, as of 2010[update] | Rank | Company | Revenue 2010 (Rs crore) | Revenue 2010 (Rs billion) | 1 | Ranbaxy Laboratories | 4,198.96 | 41.989 | 2 | Dr. Reddy's Laboratories | 4,162.25 | 41.622 | 3 | Cipla | 3,763.72 | 37.637 | 4 | Sun Pharmaceutical | 2,463.59 | 24.635 | 5 | Lupin Ltd | 2,215.52 | 22.155 | 6 | Aurobindo Pharma | 2,081.19 | 20.801 | 7 | GlaxoSmithKline | 1,773.41 | 17.734 | 8 | Cadila Healthcare | 1,613 | 16.13 | 9 | Aventis Pharma | 983.80 | 9.838 | 10 | Ipca Laboratories | 980.44 | 9.8044 | Major players [edit] Ranbaxy Laboratories Ranbaxy is the leader in the Indian pharmaceutical market, taking in $1.174 billion in revenues for a net profit of $160 million in 2004. It was the first Indian pharmaceutical to have a proprietary drug (extended-release ciprofloxacin, marketed by Bayer) approved by the U.S. FDA, and the U.S. market accounts for 36% of its sales. 78% of Ranbaxy’s sales are from overseas markets; its offices in 44 countries manage manufacturing in 7 countries and distribution in over 100. IMS Health estimated that Ranbaxy is among the top 100 pharmaceuticals in the world and that it is the 15th fastest growing company. By 2012, Ranbaxy hopes to be one of the top 5 generics producers in the world, and it consolidated its position with the purchase of French firm RGP Aventis in 2003. Ranbaxy also has higher aspirations, however, “to build a proprietary prescription business in the advanced markets...
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...INDIAN MARKET Due to poor sanitation conditions, infectious (acute) diseases are predominant in India. However, the incidence of chronic ailments, characterised by prolonged exposure, has been increasing with the emergence of lifestyle diseases in India, due to changing work pattern of the working population, higher stress levels, and unhealthy eating habits. Key issues answered through this analysis: What are acute and chronic ailments? What is the proportion of drugs for each segment in the total domestic formulations market? How have various therapeutic categories in the domestic formulation market performed over the last three years? Publish Date: 15-Jul-2013 | | Majority of ailments in India are more acute than chronic in nature Types of ailments Source: CRISIL Research Ailments can be classified into acute and chronic. Acute ailments are characterised by sudden, severe exposure (usually a single, large exposure) and rapid onset of the disease. The patient shows intense symptoms for a brief duration (not longer than 30 days). Infectious diseases such as common cold, fever, etc are some examples of acute ailments. However, some acute ailments may turn chronic if left unaddressed. Chronic ailments are characterised by prolonged or repeated exposures over many days, months or years. Chronic diseases can only be alleviated through treatments, but not fully cured. Unlike acute ailments, they do not usually resolve on their own accord. Examples of...
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...country accounts for the second largest number of Abbreviated New Drug Applications (ANDAs) and is the world’s leader in Drug Master Files (DMFs) applications with the US. Indian drugs are exported to more than 200 countries in the world, with the US as the key market. Generic drugs account for 20 per cent of global exports in terms of volume, making the country the largest provider of generic medicines globally and expected to expand even further in coming years. Pharmaceuticals Exports Promotion Council (Pharmexcil) expects pharmaceutical exports to reach US$ 25 billion in 2015. The Government of India plans to set up a US$ 640 million venture capital fund to boost drug discovery and strengthen pharmaceutical infrastructure. The ‘Pharma Vision 2020’ by the government’s Department of Pharmaceuticals aims to make India a major hub for end-to-end drug discovery. Trends in Indian Pharmaceutical sector revenue * The Indian pharmaceuticals market increased at a CAGR of 12.79 per cent...
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...Industry Snapshot The Indian pharmaceutical industry is highly dynamic and offers great opportunities for both domestic and foreign companies. The industry is estimated to have generated revenue worth US$ 13.1 billion in FY 2011, according to a new Research and Market’s report, “Indian Pharma Sector Forecast 2014.” India will emerge as a leading global player in pharmaceutical industry by 2020, securing a place among the top five major global markets, according to Ikon Marketing Consultant (IMC). Also, Associated Chambers of Commerce and Industry (Assocham) has said it expects the Indian pharmaceutical industry to reach US$ 20 billion by 2015, making it one of the world's top 10 pharmaceuticals markets. India has a strong local manufacturing base and domestic players are developing substantial international presence. Healthcare is also one of the largest service sector industries in India, in terms of revenue and employment. Rising health awareness and increasing government expenditure on healthcare sector is driving growth in the sector. Medical tourism and health insurance are also on a rise, with significant growth in healthcare sector and establishment of large number of hospitals, both public and private. The Indian healthcare industry, estimated at US$ 50 billion, is expected to reach over US$ 75 billion by 2012, and US$ 100 billion by 2015. Talent Challenges While specialised talent is critical for any knowledge industry, it is more so within the pharmaceuticals industry...
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...45 46 47 48 49 50 51 52 53 54 55 56 57 Company Reliance Industries Limited Tata Consultancy Services (TCS) Infosys Technologies Ltd Wipro Limited Bharti Tele-Ventures Limited ITC Limited Hindustan Lever Limited ICICI Bank Limited Housing Development Finance Corp. Ltd. TATA Steel Limited Ranbaxy Laboratories Limited HDFC Bank Ltd Tata Motors Limited Larsen & Toubro Limited (L&T) Satyam Computer Services Ltd. Maruti Udyog Limited Bajaj Auto Ltd. HCL Technologies Ltd. Hero Honda Motors Limited Hindalco Industries Ltd Reliance Energy Limited Grasim Industries Limited Jet Airways (India) Ltd. Sun Pharmaceuticals Industries Ltd Cipla Ltd. Gujarat Ambuja Cements Ltd. Videsh Sanchar Nigam Limited The Tata Power Company Limited Sterlite Industries (India) Ltd. Associated Cement Companies Ltd. Nestlé India Ltd. Hindustan Zinc Limited GlaxoSmithKline Pharmaceuticals Limited Siemens India Ltd. Motor Industries Company Limited Mahindra & Mahindra Limited UTI Bank Ltd. Zee Telefilms Limited Bharat Forge Limited ABB Limited i-Flex Solutions Ltd. Dr. Reddy's Laboratories Ltd. Nicholas Piramal India Limited Kotak Mahindra Bank Limited Reliance Capital Ltd. Ultra Tech Cement Ltd. Patni Computer Systems Ltd. Wockhardt Limited Indian Petrochemicals Corporation Limited Biocon India Limited Essar Oil Limited. Asian Paints Ltd. Dabur India Limited Jaiprakash Associates Limited JSW Steel Limited Tata Chemicals Limited Tata Tea Limited 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78...
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...Pharmaceuticals and Life Sciences Global pharma looks to India: Prospects for growth Table of contents Introduction 03 Background 04 A fast growing economy An expanding pharmaceutical market Government-provided healthcare improving, but private healthcare dominates Domestic market overview 09 Background Consolidation underway, despite challenges Contract manufacturing Vaccines Over the counter market holds significant potential Reaching the untapped rural market Growing Research & Development 15 Overview Clinical trials Biotech and biosimilars on track for growth Other growth areas Bioinformatics 20 Stem cell research Medical devices Global Pharma’s evolving business models and options in India 23 Background Export-oriented business (Contract Research and Manufacturing Services) Licensing Franchising Joint ventures Wholly-owned subsidiaries Practical concerns 27 Infrastructure Tax environment Counterfeiting Intellectual property Conclusion 30 Related reading: Pharma 2020 31 References 32 Acronyms 38 Introduction The pharmaceutical industry’s main markets are under serious pressure. North America, Europe and Japan jointly account for 82% of audited and unaudited drug sales; total sales reached US$773 billion in 2008, according to IMS Health. Annual growth in the European Union (EU) has slowed to 5.8%, and sales are increasing at an even more sluggish rate...
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...pharmaceutical industry is estimated at $8 billion in 2013 and had been growing at an average rate of 8–9 %. The industry was highly fragmented with more than 1000 players out of which 30% of market was controlled by top ten companies and the rest of 70% by small companies. The Global pharmaceutical industry was estimated at $ 600 billion in 2013. Indian pharmaceutical industry has become more innovative and enterprising with more investment in R&D especially since the WTO agreement was signed. Indian drug makers command 10 per cent share in the USD 30 billion US generic drug market and also has the highest (over 150) US Foods & Drug Administration (FDA) approved facilities. US accounts for one-fourth of the Indian drug exports. The share of Indian pharma companies in the total approvals for generic drugs called Abbreviated New Drug Application (ANDA) has risen steadily. From 32 per cent in 2009, it went up to 38.5 per cent in 2013. Increasing share of Indian companies in total ANDAs approved by the USFDA can be attributed to increase spending by them for research and development (R&D) activities. As per CMIE’s database, the industry’s R&D expenses to sales ratio jumped to around five per cent in 2012-13 from around three per cent in 2003-04. The export of drugs from India is expected to grow by 4.2 per cent to USD 15.2 billion in 2013-14. Around USD 16.3 billion of drugs are likely to be shipped from the country in 2014-15. This translates into a growth of 7.3 per cent. In 2015-16, drug...
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...532540 | TATA CONSULTANCY SERVICES LTD. | 2476.20 | 485020.22 | 500325 | RELIANCE INDUSTRIES LTD. | 926.85 | 299924.43 | 500312 | OIL AND NATURAL GAS CORPORATION LTD. | 329.90 | 282245.62 | 500875 | ITC LTD. | 351.75 | 281945.90 | 500180 | HDFC BANK LTD. | 1018.90 | 255386.81 | 500209 | INFOSYS LTD. | 2181.95 | 250590.92 | 524715 | SUN PHARMACEUTICAL INDUSTRIES LTD. | 1037.30 | 249580.69 | 533278 | COAL INDIA LTD. | 381.10 | 240716.65 | 500112 | STATE BANK OF INDIA | 291.05 | 220214.48 | 500010 | HOUSING DEVELOPMENT FINANCE CORP.LTD. | 1302.50 | 205103.56 | 500696 | HINDUSTAN UNILEVER LTD. | 936.50 | 202608.48 | 532174 | ICICI BANK LTD. | 310.10 | 179783.31 | 532454 | BHARTI AIRTEL LTD. | 406.05 | 162314.43 | 500510 | LARSEN & TOUBRO LTD. | 1742.25 | 161952.95 | 500570 | TATA MOTORS LTD. | 535.20 | 145791.31 | 507685 | WIPRO LTD. | 586.55 | 144822.68 | 532281 | HCL TECHNOLOGIES LTD. | 939.00 | 131994.85 | 532555 | NTPC LTD. | 158.00 | 130278.34 | 532215 | AXIS BANK LTD. | 534.15 | 126636.79 | 532500 | MARUTI SUZUKI INDIA LTD. | 3642.40 | 110029.64 | 500247 | KOTAK MAHINDRA BANK LTD. | 1384.75 | 106951.54 | 530965 | INDIAN OIL CORPORATION LTD. | 359.80 | 87357.73 | 500530 | BOSCH LTD. | 25577.00 | 80308.97 | 500257 | LUPIN LTD. | 1768.65 | 79498.75 | 532898 | POWER GRID CORPORATION OF INDIA LTD. | 150.20 | 78578.48 | 500820 | ASIAN PAINTS LTD. | 819...
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...Introduction There is a rising trend outward FDI (OFDI) from emerging market, mostly dominated by countries such as China and India (Gao, Liu, & Zhou, 2013). China’s outward FDI increased from $27 billion in the year 2000 to $230 billion by the end of the year 2009. Since the late 1990s, India’s OFDI has increased to $77 billion by the end of the year 2009 (Buckley, Forsans, & Munjal, 2012). Porter’s national competitive advantage emphasizes productivity growth as the focus of success in international trade. John Dunning went on to explain in detail the drivers of OFDI using his eclectic theory of ownership, location, and internalization advantage including four major motives: market-seeking, resource-seeking, efficiency-seeking and strategic asset seeking (Gao, Liu, & Zhou, 2013). Market seeking Firms aim to capitalise on ownership of well-established brands, marketing skills and overseas distribution networks by seeking large foreign markets (Buckley, Forsans, & Munjal, 2012). Since China’s WTO accession, because of over-capacity in some sectors, Chinese manufacturers have started to invest in developed countries as well as in developing countries. Shanghai Automobile Industry Corp. bought over 50 percent stake in Korean Ssangyong Motor Co. in 2004, and TCL acquired the colour TV manufacturing from French Thomson in 2004 in order to expand their markets and achieve economies of scale. CDC Software, a wholly owned subsidiary of Chinese CDC Corporation, acquired...
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