Interfirm comparison
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Transcript of Interfirm comparison
Inter-firm comparison of Cipla and Torrent
PharmaceuticalsPresentation by:
Varun Nigam
Varun Balakrishnan
Soumya Mukherjee
Saurabh Mhase
Indian Pharmaceutical Market
India is the 14th largest Pharma Market in the
world!
Valued at
Rs. 600 bn
15-17%
Growth Rate
Dominated by Branded
Generics
FY2007FY2008FY2009FY2010FY2011FY2012FY20130
100
200
300
400
500
600
Indian Pharma Market
INR in billion
Growth Drivers
Growing
Population
Increase in Drug Penetration Level
Income level Increase
Growing incidence of
Chronic Ailments
Improving Medical
Infrastruture
Increased Government spending on Healthcare
Availability of new forms of Treatment
Swot Analysis: Cipla
S W
O T
Support to cancer patients
P. falciparum malaria‘No Touch Breast
Scan’Foremost player in anti-infective
and anti-asthmatic formulations
Strong employee force
Limited market share
Negative Campaign of AHF
Venture into Alzheimer’s
disease medicationCan use Viramune generic to achieve
higher growthIncreased
investment in the budding markets
Constant price rises in the Indian The Indian
Rupee depreciated
Fluctuations in currency exchange
rates
Swot Analysis: Torrent
S W
O T
High market Share
High Growth Rate
Strong Innovation
Global Presence
Low Employee Strength
High Debts
AquisationsProduct Expansion
Emerging Markets
Constant price rise
The Indian Rupee
depreciatedFluctuations
in currency exchange
rates
Cipla overview• Cipla Limited is a pharmaceutical company based
in Mumbai
• Cipla makes drugs to treat cardiovascular disease, arthritis etc.
• Market capitalization is US$ 5.6 billion (2013)
• Cipla has 34 manufacturing units in 8 locations across India and has presence in 170 countries
• It has over 2000 products in 65 therapeutic categories
History of Cipla• 1935- Founded in by Dr. K. A. Hamied
• Vision: To make India self-sufficient in healthcare
• 1939- Encouraged by Mahatma Gandhi by visiting the company
• 1960- API manufacturing technology
• 1996- World’s first transparent dry powder inhaler
• 2001- HIV medicines
• 2005- Anti bird-Flu drug invented within 2-3months
• 2012- Reached 20000 employees level
Overview of Torrent Pharma
• Torrent Pharmaceuticals Ltd. is the flagship company of the Torrent Group
• Initially was named as Trinity Laboratories Ltd
• Operates in more than 50 countries with over 1000 product
• It has 7 fully owned subsidiaries
History of Torrent Pharma
• 1970 – Founded by Mr. U N Mehta
• 1992- President's award for highest pharmaceuticals exports of Rs. 1570 million
• 1994- Almost doubled its manufacturing capacity
• 2001- India's ninth best company among capital intensive companies in terms of ROCE in a study by ETIG-BCG
Current Market Price
Rs. 423.5 Rs. 526.3
As of 23-01-2014
Some of the ProductsCipla Drugs Purpose
Cost (in Rs.)
Escitalopram Anti-depressant 840
Isotroin Acne Treatment 108
Entavir Chronic Hep-B 1400
Triomune HIV/AIDS 662
Oseltamivir Swine Flu 5022
Asthalin Asthma 67
Levoflox chemotherapeutic antibiotic 46
Cefoprox anti-bacterial 91.22
Montair anti-allergic 120
Vanlid anti-bacterial 900
Tachyra Cardiac 48
Some of the ProductsTorrent Pharma Drugs
Purpose Cost (in Rs.)
Enselin Cardiac 85Azukon Pregnancy,Lactation 43Calcigard Hypertension 12.39Domstal Acute Nausea, Vomiting 35
Symbal Diabetes 112Dilzem Calcium Channel
blockers23.84
Hexidol schizophrenia 38Diclomax Arthritis 15Promotil Cardiovascular 30.25Zaplon Insomnia 60.14Macrotor Respiratory 72
Key financials of the Companies (Year-to-Year)Cipla
Item Mar ‘13 Mar ‘ 12 Mar ‘11 Mar ‘10 Mar ‘09
Total Income (Rs. In crores)
8,722.30 7,114.56 6,561.49
5,915.49
5,208.33
Percentage change in income from previous year
22.6% 8.42% 10.92% 13.6% -
Total expenses (Rs. In crores)
6,374.03 5,384.4 5,149.1 4,408.85
4,103.0
Net Profit (Rs. In crores) 1,507.11 1,123.96 960.39 1,081.49
776.81
Percentage change in Net Profit
34.08% 17.03% -11.2% 39.22% -
Total Equity Dividend (Rs. In crores)
160.58 160.58 224.81 160.58 155.46
Shares in issue (in Lacs) 8,029.21 8,029.21 8,029.21
8,029.21
7,772.91
Earnings Per Share (Rs.) 18.77 14 11.96 13.47 9.99
Book value (Rs.) 110.47 94.04 82.36 73.55 55.86
Total Assets (Rs. In crores)
9,835.33 7,562.48 7,053.43
5,919.16
5,290.99
Key financials of the Companies (Year-to-Year)Torrent Pharmaceuticals
Item Mar ‘13 Mar ‘ 12 Mar ‘11 Mar ‘10 Mar ‘09
Total Income (Rs. In crores)
2,970.84 2,162.69 1,873.17
1,429.14
1,196.22
Percentage change in income from previous year
37.4% 15.5% 31.06% 19.5% -
Total expenses (Rs. In crores)
2,197.51 1,698.06 1,418.23
1,032.11
929.16
Net Profit (Rs. In crores) 546.42 311.25 290.86 207.37 186.73
Percentage change in Net Profit
75.6% 7.01% 40.3% 11.05% -
Total Equity Dividend (Rs. In crores)
194.61 71.92 67.69 50.77 33.84
Shares in issue (in Lacs) 846.11 846.11 846.11 846.11 846.11
Earnings Per Share (Rs.) 64.58 36.79 34.38 24.51 22.07
Book value (Rs.) 195.14 154.17 129.18 104.11 86.59
Total Assets (Rs. In crores)
2,230.25 1,764.65 1,665.09
1,403.26
1,214.75
Key financials of the Companies (Q to Q)Cipla
Item Sept ‘13 June ‘ 13 Mar ‘13 Dec ‘12 Sept ‘12
Net Profit for the period (Rs. Crores) 376.03 474.9 267.56 338.78 500.01
Percentage change in Net profit -20.81% 77.5% -21.02% -32.24% -
Torrent Pharmaceuticals
Item Sept ‘13 June ‘ 13 Mar ‘13 Dec ‘12 Sept ‘12
Net Profit for the period (Rs. Crores) 114 182 214 153 83.84
Percentage change in Net profit -37.36% -14.95% 39.86% 82.5% -
Cash Flow Comparison
Item CiplaTorrent
Pharmaceuticals
Net Cash From Operating Activities (Rs. In crores)
1,381.34 -68.69
Net Cash (used in)/from investing Activities (Rs. In crores)
-2,064.16 -89.48
Net Cash (used in)/from Financing Activities (Rs. In crores)
732.83 25.49
Net (decrease)/increase In Cash and Cash Equivalents (Rs. In crores)
50.01 -132.68
Financial Ratios Comparison
Ratios Cipla Torrent Pharma
Inventory Turnover Ratio 3.5 3.98
Debtors Turnover Ratio 5.18 4.46
Investments Turnover Ratio 3.5 3.98
Fixed Assets Turnover Ratio 1.65 2.35
Total Assets Turnover Ratio 0.83 1.25
Asset Turnover Ratio 0.94 1.38
Ratio Analysis-FY2013Face value
2 5
Comment: The Interest rates are lower than the Bond’s Coupon Rate for Torrent- Bonds are sold
at a premium.
The nominal value or rupee value of a security stated by the issuer.
Ratio Analysis-FY2013Current Ratio
1.95
1.59
Comment: Cipla can better meet its liabilities which are due over the next 12 months and
save more money.
=Current Assets/ Current Liabilities
Ratio Analysis-FY2013Quick Ratio
1.68
1.24
Comment: The position of Cipla is better.
=Quick Assets/ Current Liabilities
Ratio Analysis-FY2013Debt Equity Ratio
0.11
0.35
Comment: Torrent has a high debt load than Cipla
=Total Debt/ Shareholder Equity
Ratio Analysis-FY2013Net Profit Margin
17.87%
18.85%
Comment: Torrent more efficient in converting Sales into actual Profit
=PAT/ Revenue
Ratio Analysis-FY2013Return on Capital Employed (ROCE)
20.79%
33.14%
Comment: The Rate at which Torrent borrows is good
=EBIT/ (Total Assets-Current Liabilities)
The Better One – In terms of growth rate
Year to Year highest
39.22%
75.6%
Quarter to Quarter highest
77.5% 82.5%
The Better One – In terms of ratios
More Liquidity
Better Net Profit Margin
Less Debt Better ROCE
Thank You