Investment and Protfolio Analysis - Assignment of Pharma Companies R B036

8/2/2019 Investment and Protfolio Analysis - Assignment of Pharma Companies R B036

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Adjusted EPS

Company 2002 2001 2000 1999 1998

Abbott Lab I Ltd 6.72 10.78 24.96 17.68 2.28

Ajanta Pharma Ltd 1.51 5.96 21.02 23.54 21.22

Aurobindo Pharma Ltd 25.22 32.93 73.41 52.63 50.55

Cadila Healthcare Ltd 10.70 10.56 6.65 13.95 13.35

Cipla Ltd 37.87 28.83 21.91 57.10 52.59

Dr Reddys Lab Ltd 60.21 45.11 22.84 19.26 22.26

Duphar Int Ltd 20.98 15.69 45.75 32.39 11.88

German Remedies Ltd 29.68 39.59 39.07 31.91 24.90Glaxo India Ltd 15.58 11.57 9.22 11.13 8.99

Lupin Lab Ltd 9.88 7.18 10.91 9.06 17.15

Max India Ltd 6.44 6.75 32.11 153.97 (5.81)

Morepen Lab Ltd 4.24 7.56 25.40 17.37 13.84

Nicholas Piramal I Ltd 17.45 19.81 15.54 15.76 24.35

Novartis I Ltd 15.02 11.17 32.23 23.81 15.64

Orchid Chem & Pharma 2.25 13.01 8.35 18.81 19.66

Pfizer India 20.90 17.59 30.97 19.46 17.61

Smithkline Bec Pharma 10.44 8.81 11.60 22.88 13.19

Sun Pharma Ind Ltd 36.43 27.77 50.47 37.10 36.36

Torrent Pharma 24.08 17.16 16.76 15.33 18.59

Zandu Pharma 167.57 126.65 52.63 135.31 121.62

Definition

Formula

(20.00)

-

20.00

40.00

60.00

80.00

100.00

120.00

140.00

160.00

180.00

1998


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Comment:-


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EPS is a small variation of return on equity capital ratio and is calculated by dividing the net

profit after taxes and preference dividend by the total number of equity shares.

ADJUSTED EPS RATIO = EBIT ADJUSTMENT / NO. OF EQUITY SHARES

1999 2000 2001 2002

Abbott Lab I Ltd

Ajanta Pharma Ltd

Aurobindo Pharma Ltd

Cadila Healthcare Ltd

Cipla Ltd

Dr Reddys Lab Ltd

Duphar Int LtdGerman Remedies Ltd

Glaxo India Ltd

Lupin Lab Ltd

Max India Ltd

Morepen Lab LtdNicholas Piramal I Ltd

Novartis I Ltd

Orchid Chem & Pharma

Pfizer IndiaSmithkline Bec Pharma

Sun Pharma Ind Ltd

Torrent Pharma

Zandu Pharma


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From the case, we can analyze that, Ajanta Pharmaceuticals Ltd has been studiedly declining

from the year 1998 to 2002 that is from 21.22 to 1.51 by which we can the company is losing

its business and in future eventually may undergo to the bankruptcy.

On the other side, the company Dr. Reddy's Laboratories show a steady growth from year

1998 to 2002 approximately a growth by 170.49% which is better than other pharma

companies. Apart from Dr. Reddy's Laboratories, the companies like Duphar Interfran Ltd,

German Remedies Ltd, Glaxo India Ltd, Pfizer Ltd, Torrent Pharmaceuticals Ltd and Zandu

Pharmaceuticals Works Ltd also shows a steady growth in the Industry.Zandu Pharmaceuticals Works Ltd shows a higher Earning per share for all the five years

indicating a good measure of profitability and shows that the earning power of the company

has increased.

It can also be analyze that, the pharmacy company like Max India Ltd shows a highest

negative slowdown in the industry indicating a negativity of around 210% form the year 1998

to 2002 which also includes other companies like Orchid Chemicals and Pharmaceuticals,

Morepen Laboratories Ltd and Aurobindo Pharma Ltd.

The company like Sun Pharmaceutical Industries Ltd shows a consistency in the Earning Per

Share ratio right from year 1998 to 2002. Max India Ltd shows a great negativity but has

improved his performance from year 1998 to 2002 showing a positive sign.

Hence, a company giving high Growth fund can be Dr. Reddy's Laboratories and ZanduPharmaceuticals Works Ltd where as a Consistent return fund can be considered as Sun

Pharmaceutical Industries Ltd and Novartis India Ltd.


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Dividend Per Share

Company 2002 2001 2000 1999 1998

Abbott Lab I Ltd - 2.00 3.00 1.25 -



Cadila Healthcare Ltd 3.50 3.00 3.00 - 4.00Cipla Ltd 7.00 4.50 5.50 7.50 5.50

Dr Reddys Lab Ltd 7.50 4.00 3.00 3.00 3.00

Duphar Int Ltd 6.00 2.50 5.00 5.00 2.50

German Remedies Ltd 8.00 7.00 9.00 7.00 4.50

Glaxo India Ltd 5.50 5.00 6.00 5.00 4.00

Lupin Lab Ltd 2.50 2.50 2.50 2.50 5.00

Max India Ltd - 3.50 28.75 104.50 2.00

Morepen Lab Ltd 3.00 3.50 3.50 3.00 2.50


Novartis I Ltd 7.50 7.50 15.00 8.50 4.00Orchid Chem & Pharma 4.00 4.00 4.00 4.00 4.00

Pfizer India 5.00 4.00 5.00 4.00 3.00



Torrent Pharma 8.00 7.50 - 6.00 5.00

Zandu Pharma 40.00 37.00 37.00 37.00 35.00

Definition

Formula

Comment

-2.004.006.008.00

10.0012.0014.0016.00

18.0020.0022.0024.0026.0028.0030.0032.0034.0036.0038.0040.0042.0044.0046.0048.0050.00

52.0054.0056.0058.0060.0062.0064.0066.0068.0070.0072.0074.0076.0078.0080.0082.0084.00

86.0088.0090.0092.0094.0096.0098.00

100.00

1


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v en s are a orm o pro s r u on o e s are o er. av ng a grow ng

dividend per share can be a sign that the company's management believes that the

Dividend Per Share = Dividend paid to ordinary shareholders / Number of equity sha

From the data given from the case, we can analyze that the company including Zandu

Pharmaceuticals Works Ltd shows the highest dividend per share ratio for the years

apart from the year 1999. Also, the company Nicholas Piramal India Ltd shows a

stable ratio throughout all the five years. Even the company like Novartis India Ltd

998 1999 2000 2001


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from 2.00 to 104.50 but on the other side it shows a highest fall right after 1999 to

2002 that is from 104.50 to 0.00 which indicates that the company does not have a

good sign of growth and cannot be sustain no longer in the pharmacy industry,

whereas the company like Zandu Pharmaceuticals Works Ltd provides the highest

dividend to its shareholders. Apart from the company like Zandu Pharmaceuticals

Works Ltd , a company like Lupin Laboratories and Cadila Healthcare Ltd provides aHence, a company showing a positive sign enables that the company earns a healthy

return on its sales and provides its profit sharing in the form of if dividend to its

However, a company giving high Growth fund can be Zandu Pharmaceuticals Works

Ltd where as a Consistent return fund can be considered as Nicholas Piramal India

Ltd and Novartis India Ltd.


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es Number of equity.

2002


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Abbott Lab I LtdAjanta Pharma Ltd



Cipla Ltd

Dr Reddys Lab Ltd

Duphar Int Ltd

German Remedies Ltd

Glaxo India Ltd

Lupin Lab Ltd

Max India Ltd

Morepen Lab Ltd

Nicholas Piramal I Ltd

Novartis I Ltd


Pfizer India

Smithkline Bec Pharma

Sun Pharma Ind Ltd

Torrent Pharma

Zandu Pharma


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Book Value

Company 2002 2001 2000 1999 1998

Abbott Lab I Ltd 71.35 72.09 128.04 25.34 14.13




Cipla Ltd 146.65 119.02 94.11 225.61 176.40Dr Reddys Lab Ltd 190.55 145.19 143.95 128.68 113.96

Duphar Int Ltd 257.18 228.38 254.87 216.24 206.65


Glaxo India Ltd 75.27 65.99 60.32 54.14 45.14

Lupin Lab Ltd 79.66 73.77 72.87 83.15 79.30

Max India Ltd 219.34 224.12 450.93 163.16 124.69

Morepen Lab Ltd 42.98 47.79 205.49 112.72 95.76


Novartis I Ltd 65.27 52.34 102.80 86.99 72.99

Orchid Chem & Pharma 107.03 135.16 129.25 95.48 81.32Pfizer India 72.47 55.71 89.37 64.19 60.84



Torrent Pharma 108.41 105.27 93.02 82.72 74.82

Zandu Pharma 886.76 779.81 688.04 631.95 536.90


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Definition

Formula

Comments


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The value at which an asset is carried on a balance sheet.

Total Assets less Intangible Assets / No. of Shares Outstanding

From the given data and a graph arrived, we can clearly indicates that the Zandu

Pharma Shows a very high growth rate from the year 1998 to 2002. There has been

significant increase of approximately 65%. Along with Zandu Pharma Dr. Reddy Lab

Ltd also shows a very significant growth of around 67%. Hence both the pharma

On the other side, it can be analysed that the company like Duphar Interfran Ltd,

Ajanta Pharmaceuticals, Lupin Laboratories Ltd shows a high amount of stableThe company showing low book value under its Balance Sheet portfolio analysed and

cannot be stabilized in the market, the company which includes Sun Pharma

Industries Ltd, Smithkline Beecham Pharmaceuticals , Morepen Laboratories,

However, a company giving high Growth fund can be Zandu Pharmaceuticals Works

Ltd , Dr. Reddy Lab Ltd and Torrent Pharmaceuticals Ltd where as a Consistent

4.0034.0064.00

94.00

124.00154.00

184.00214.00

244.00274.00

304.00334.00

364.00394.00

424.00454.00

484.00514.00

544.00574.00

604.00

634.00664.00

694.00724.00

754.00784.00

814.00844.00

874.00

1998 1999 2000 2001


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2002

Abbott Lab I Ltd

Ajanta Pharma Ltd



Cipla Ltd

Dr Reddys Lab Ltd

Duphar Int Ltd

German Remedies Ltd

Glaxo India Ltd

Lupin Lab Ltd

Max India Ltd

Morepen Lab Ltd


Novartis I LtdOrchid Chem & Pharma

Pfizer India


Sun Pharma Ind Ltd

Torrent Pharma


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Zandu


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Duphar Abbott

Cadila Cipla

Glaxo Smithklin

Torrent Orchid

Morepen

Novartis


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Return on Net Worth

Company 2002 2001 2000 1999 1998

Abbott Lab I Ltd 8.59 8.58 5.23 5.88 (3.56)





Duphar Int Ltd 12.33 0.95 17.51 14.96 6.29


Glaxo India Ltd 13.43 17.88 21.37 20.74 20.62

Lupin Lab Ltd 12.13 10.97 15.08 12.04 18.88

Max India Ltd 1.86 0.99 7.15 93.78 6.95

Morepen Lab Ltd 12.60 15.76 12.25 17.28 14.44


Novartis I Ltd 31.30 24.98 31.57 26.93 16.48




Torrent Pharma 22.43 25.73 10.77 19.05 24.48

Zandu Pharma 18.16 16.90 7.88 21.92 23.76


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Definition

Formula

Comments

(4.00)

16.00

36.00

56.00

76.00

96.00

116.00

136.00

1998


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Return on networth is used in the finance as a measure of companies profitabilityIt also reveals that how much profit a company can generates with money that the

companies shareholder has invested.

Return on Networth = Net Income / Shareholder's Equity * 100

From the given data, we can analysed that every company shows ups and downs in

all the five years, here it means companies are being volatile in the market.

But a Company like Abbott laboratories India Ltd which shows a negative return in

the year 1998 but therefter it shows a steady growth in the coming four years wherein

Companies like Pfizer Ltd , Nicholas Piramal India Ltd, Novartis India Ltd and Dr.

Reddy Laboratories Ltd shows a high growth in the pharmacy industries though the

above comapanies where being volatile in the market but there has been significant

The companies like Ajanta Pharmaceuticals Ltd , Aurobindo Pharma Ltd and Orchid

Chemicals and Pharmaceuticals turns up to low return provider to its shareholders.

It can also be analysed that the company like Sun Phamaceutical Industries Ltd and

Cipla Ltd shows a consistant return to its shareholders as per its market share.

1999 2000 2001 2002

Abbott Lab I Ltd

Ajanta Pharma Ltd



Cipla Ltd

Dr Reddys Lab Ltd

Duphar Int Ltd

German Remedies Ltd

Glaxo India Ltd

Lupin Lab Ltd

Max India Ltd

Morepen Lab Ltd


Novartis I Ltd


Pfizer India


Sun Pharma Ind Ltd

Torrent Pharma

Zandu Pharma


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Total Debt/Equity

Company 2002 2001 2000 1999 1998

Abbott Lab I Ltd - 0.04 0.11 1.71 1.68





Duphar Int Ltd 0.01 0.06 0.06 0.09 0.05

German Remedies Ltd - 0.01 0.04 0.15 0.16

Glaxo India Ltd 0.01 0.08 0.05 0.06 0.19

Lupin Lab Ltd 1.78 2.05 1.92 2.07 2.04

Max India Ltd 0.36 0.24 0.17 0.24 0.84

Morepen Lab Ltd 1.58 1.12 0.99 1.34 1.01


Novartis I Ltd 0.05 0.56 0.04 0.09 0.11

Orchid Chem & Pharma 1.44 0.83 0.91 1.84 1.31Pfizer India - - - 0.01 0.26

Smithkline Bec Pharma - - - - -


Torrent Pharma 0.09 0.35 0.48 1.71 1.62

Zandu Pharma 0.27 0.81 0.90 1.15 1.68

Definition

Formula

Comments

-

0.50

1.00

1.50

2.00

2.50

1998


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The debt-to-equity ratio (D/E) is a financial ratio indicating the relative proportion of

shareholders' equity and debt used to finance a company's assets.

Debt to Equity Ratio = Debt (Liabilities) / Equity

The points plotted on the graph with the given data indicates many of the pharma

companies shows much ups and down in the industry within the five years spam.

Every company except Orchid Chemicals and Pharmaceuticals and Morepen

Laboratories Ltd shows positive growth in the year 2002 when compare with the year

1998A companies like Zandu Pharmaceuticals Works Ltd, Abbott Laboratories and Torrent

Pharmaceuticals shows a highest negative towards its Total Debt when compare with

its Equity which examines that there is much more liability left unpaid by the

companies in a particular year.

The companies like Pfizer Ltd was much more controllable has the ratio of Total Debts

towards Equity was nulifies after the year 1999

1999 2000 2001 2002


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We can also examine that if the ratio is more than 2 it can be considered as company

would be on higher risky side.


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Abbott Lab I Ltd

Ajanta Pharma Ltd



Cipla Ltd

Dr Reddys Lab Ltd

Duphar Int Ltd

German Remedies Ltd

Glaxo India Ltd

Lupin Lab Ltd

Max India Ltd

Morepen Lab Ltd

Nicholas Piramal I LtdNovartis I Ltd


Pfizer India


Sun Pharma Ind Ltd

Torrent Pharma

Zandu Pharma


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Debt Coverage Ratio

Company 2002 2001 2000 1999 1998

Abbott Lab I Ltd 24.34 19.58 6.92 2.56 1.95





Duphar Int Ltd 38.56 46.26 18.41 15.72 6.70


Glaxo India Ltd 14.43 11.16 10.09 13.33 9.72

Lupin Lab Ltd 2.32 1.83 2.06 1.74 2.26

Max India Ltd 2.44 3.64 7.45 17.17 1.37

Morepen Lab Ltd 2.54 2.11 2.95 2.97 3.11


Novartis I Ltd 27.78 7.11 82.37 29.43 10.46




Torrent Pharma 9.85 7.19 3.44 2.17 2.27

Zandu Pharma 6.22 3.92 2.69 3.40 2.80


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Definition

Formula

Comments

2.00

102.00

202.00

302.00

402.00

502.00

602.00

702.00

1998


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Debt Coverage Rato = Profit Before Interest Payment / Fixed Rate Obligation

Analysing the data we can intimate that the company like Abbott Laboratories India

Ltd, German Remedies Ltd and Dr. Reddy's Laboratories Ltd shows a consistantA company like Smithkline Beecham Pharmaceuticals shows the highest Debt

coverage ratio in the year 2002 , here there has been very high difference if the same

has been compared with the year 2001. The same hike is observed with other

comapnies like Pfizer Ltd, Sun Pharmaceuticals Ltd and Dr. Reddy;s Laboratories Ltd.

spam of five years.

A company named Pfizer Ltd shows a very high debt coverage ratio from the year

1999 2000 2001 2


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02

Abbott Lab I Ltd

Ajanta Pharma Ltd



Cipla Ltd

Dr Reddys Lab Ltd

Duphar Int Ltd

German Remedies Ltd

Glaxo India Ltd

Lupin Lab Ltd

Max India Ltd

Morepen Lab Ltd


Novartis I Ltd


Pfizer IndiaSmithkline Bec Pharma

Sun Pharma Ind Ltd

Torrent Pharma

Zandu Pharma


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Fixed Asset Turnover Ratio

Company 2002 2001 2000 1999 1998

Abbott Lab I Ltd 3.84 4.24 4.92 5.13 4.13





Duphar Int Ltd 1.49 1.11 7.12 4.77 3.74


Glaxo India Ltd 3.53 3.63 3.99 3.74 3.48

Lupin Lab Ltd 1.60 2.18 2.31 2.44 2.11

Max India Ltd 1.15 0.90 0.92 0.87 0.90

Morepen Lab Ltd 0.69 0.78 0.84 0.87 1.14


Novartis I Ltd 3.04 2.90 4.17 4.21 3.74




Torrent Pharma 1.73 1.74 2.15 1.67 2.43

Zandu Pharma 1.57 1.38 1.65 2.14 2.86


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Definition

Formula

Comments

-

2.00

4.00

6.00

8.00

10.00

12.00

14.00

1998


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Fixed Asset Turnover ratio provides how much retun on Investment is achived during

a particular period. Through this ratio we can even compare the profit margin of

different companies within the same Industry.

Fixed Asset Turnover Ratio = Sales Revenue / Fixed Assets

It has been observed that many of the above pharma companies are stable under

above data of Fixed Asset Turnover Ratio

However, the companies like Nicholas Priramal India Ltd,Sun Pharmaceuticals India

Ltd shows a better turnover ratio as compared to other Pharmaceuticals companiesOn the other hand the companies like Novartis India Ltd, Max India Ltd , German

Remedies Ltd , Cipla Ltd , Dr. Reddy's Laboratories Ltd and Abbott laboratories India

Ltd shows a stable turnover ratio under the spam of five years

The companies like Ajanta Phamarceuticals Ltd, Cadila Healthcare Ltd , Duphar

Interfan Ltd , Smithkline Beecham Pharmaceuticals Ltd and Zandu Pharmaceuticals

Ltd shows a very low turnover ratio when compared with the years between 1998 to

1999 2000 2001 2002

Abbott Lab I Ltd

Ajanta Pharma Ltd



Cipla Ltd

Dr Reddys Lab Ltd

Duphar Int Ltd

German Remedies Ltd

Glaxo India Ltd

Lupin Lab Ltd

Max India Ltd

Morepen Lab Ltd


Novartis I Ltd


Pfizer India


Sun Pharma Ind Ltd

Torrent Pharma

Zandu Pharma


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Exports as per cent of Total Sales

Company 2002 2001 2000 1999 1998

Abbott Lab I Ltd 7.03 5.35 3.39 2.31 1.81





Duphar Int Ltd 31.23 32.22 6.76 6.17 7.19

German Remedies Ltd - - 1.12 1.00 1.09

Glaxo India Ltd 6.77 8.42 8.52 8.33 6.54

Lupin Lab Ltd 24.32 30.73 35.72 33.38 31.08

Max India Ltd 26.69 9.64 14.22 14.16 13.69

Morepen Lab Ltd 12.49 9.92 9.71 10.99 13.83


Novartis I Ltd 1.22 3.40 7.28 7.29 12.35




Torrent Pharma 7.88 7.81 28.04 9.55 31.90

Zandu Pharma 0.72 0.46 0.38 0.83 0.77


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Definition

Formula

Comments

-

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

90.00

100.00

1998


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Export Turnover Ratio towards Total Sales provides the how company spreads its

market share. It can also provide how company generates its Revenue towards its

sales in foreign countries

Export Turnover Ratio = Export Sales / Total Revenue (Sales)

From the data, It has been observed that the only Company named Orchid Chemicalsand Paharmaceuticals shows the highest export turnover for all the spam of five

years, But there is consitence ratio main towrds that particular period. However apart

from Orchid Chemicals and Pharmaceuticals Ltd other companies also show a stable

ratio like Sun Pharmaceuticals India Ltd , Ajanta Pharmaceuticals Ltd, Aurobindo

Pharma Ltd, Cadila Healthcare Ltd and even Zandu Pharmacceuticals has overcome

with a consisitant growth for the last three years

1999 2000 2001 2002


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On the Other side there has been significant growth in Export Turnover Ratio for the

companies like Abbott Laboratories India Ltd though it has been on lower side with

other pharmaceuticals companies but has shown a growth of approxiemetly of 288%

when comapred from the year 1998 to 2002.

Apart from Abbott Laboratories India Ltd a company name Cipla Ltd has also shown a

significant growth of around 153% over the spam of five years


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Abbott Lab I Ltd

Ajanta Pharma Ltd



Cipla Ltd

Dr Reddys Lab Ltd

Duphar Int Ltd

German Remedies Ltd

Glaxo India Ltd

Lupin Lab Ltd

Max India Ltd

Morepen Lab Ltd


Novartis I Ltd


Pfizer India


Sun Pharma Ind Ltd

Torrent Pharma

Zandu Pharma


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Comments


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From above all the data provided for all twenty Pharmaceuticlas

companies and when compared with all the ratios provided and as per

graphical analysis it has been observed that Dr. Reddy's Laboratories

Ltdperfomance in all the ratio is well maintained and it has shown aApart from Dr. Reddy's laboaratories Ltd, the other pharma companies

like Sun Phamaceuticals Industries Ltd and Cipla Ltd have alsoWe can also conclude that the Zandu Pharmaceuticals Works Ltd ,

Max India Ltd and Novartis India Ltd has shown a consistent return

Investment and Protfolio Analysis - Assignment of Pharma Companies R B036

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Transcript of Investment and Protfolio Analysis - Assignment of Pharma Companies R B036