Ranbaxy Ltd.

8/8/2019 Ranbaxy Ltd.

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An

Assignment OnSecurity Analysis

Of Ranbaxy ltd.

Submitted To:

Rehman Sir

Subm itted By:

H etika P atel

Roll No: 16

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Index

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No Topics Pageno

1 INTRODUCTION

1.1 COMPANY PROFILE

1.2 INDUSTRY HISTORY3

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2 MANAGEMENT

2.1 CUREENT MANAGEMENT

2.2 SHARE HOLDER PATTERN

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3 IPO & FPO 9

4 LIVE PROJECT 12

5 CONCLUSION 16

6 FUTURE FORECASTING 17


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History of Company

The company manufacture and markets, generic

pharmaceuticals, value added generic pharmaceuticals,

branded generics, active Pharmaceuticals (API) and

intermediates by using finest R&D and Manufacturing

facilities, which was named as Ranbaxy Laboratories Limited

(RLL), had its origins in the early 1960s when Ranjit Singh

and Gurbux Singh, two employees of a Japanese

pharmaceutical company operating in India, formed their own

pharmaceutical preparations company in Amritsar, in Punjab

state. Two of them merged their names to form the name for

their company as Ranbaxy. The company was incorporated in

the year 1961 and linked up with a European pharmaceutical

company, began production in 1962. Ranbaxy's owners

sought additional financing and turned to a local

moneylender, Bhai Mohan Singh, by 1966 the lender came to

collect, the Ranbaxy partners offered to turn over their

company to him instead. After that pathetic situation, Singh

agreed to the deal and launched the Ranbaxy family on the

path toward building one of India's largest business empires.

Under Bhai Mohan Singh, Ranbaxy initially maintained its

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course of preparing and packing existing branded

pharmaceutical products for the Indian market. The entry of

Singh's eldest son, Parvinder, into the company in 1967,

however, set the company on a new course to become a fully

independent pharmaceutical company. The Company ranked

amongst the top ten global generic companies and has a

presence in 23 of the top 25-pharma markets of the world.

The Company with a global footprint in 49 countries, world-

class manufacturing facilities in 11 and a diverse product

portfolio, is rapidly moving towards global leadership, riding

on its success in the world's emerging and developed

markets. Ranbaxy's diverse product basket of over 5,000

SKUs available in over 125 countries worldwide encompasses

a wide therapeutic mix covering a majority of the chronic and

acute segments. Ranbaxy is among the few Indian

pharmaceutical companies in India to have initiated its

research program in the late 1970's. Ranbaxy's good fortune

came in 1970, when the Indian government passed

legislation that effectively ended patent protection in the

pharmaceutical industry. The company expanded quickly,

and by 1973, Ranbaxy opened a new factory, in Mohali, for

the production of active principal ingredients (APIs) and the

company went to public in the same year 1973. To support

its global ambition, a first of its kind world class R&D centre

was commissioned in the year 1994, which has enabled the

company to begin to enter the new chemical entities (NCE)

and novel drug delivery systems (NDDS) markets. In 1977

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the company begins production in Lagos, Nigeria through a

joint venture and in 1983 opens a dosage plant in Dewas.

The company builds a state-of-the-art API facility in Toansa in

preparation for entry into the U.S. market during the period

of 1987. The company's joint marketing agreement was

made with Eli Lilly in 1992. A joint venture was launched in

China; a new research-driven NCE and NDDS strategy was

came to effect on 1993. During 2004-05 the company opens

a new research and development facility in Gurgaon, India,

the company acquires Ohm Laboratories in the United States

and builds a new FDA-approved production facility. Ranbaxy's

own branded drugs were pierced into market in United States

and the company got underway-clinical trials on the first in-

house developed molecule in the year 1998. Ranbaxy is

focused on increasing the momentum in the generics

business in its key markets through organic and inorganic

growth routes. It continues to evaluate acquisition

opportunities in India, emerging and developed markets to

accentuate its business and competitiveness. RLL acquired

Basics, Bayer's generics business in Germany during the

period 2000. The company opened a new manufacturing

plant in Vietnam on 2001 and again company acquired RPG

(Aventis) in France, becoming the leading generics

manufacturer for that market in 2003, it sought new

alliances, the company reached a global drug discovery and

development partnership with GlaxoSmithKline in the same

year. Due to the high demand and expanding nature, the

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company launched a new production facility in Brazil in 2005

worth of $100 million. In 2006 the company established a

wholly owned subsidiary in Sweden under the name of

Ranbaxy Pharma AB for manage the operations in the

territories of Sweden, Norway, Denmark & Finland and the

company has formed a Joint venture in South Africa under

the name of Sonke Pharmaceuticals (proprietary) Ltd. RLL

acquired Terapia SA (Romania), Ethimed (Belgium), Allen

(Italy), Mundogen (Spain) and Sentek PLC's Proprietary

Technology and also the company has entered into an

agreement for acquisition on 100% Equity stake in Bio-Tabs

Pharmaceuticals (Proprietary) Ltd (SA) during the period of

2007. In January 2008, RLL entered into the Chyawanprash

segment, launched its sugar-free product under the Brand

name Chyawan Active'. The product marketed by Ranbaxy's

Global Consumer Healthcare division, will be initially

introduced in North India (Delhi, UP, Punjab and Bihar) and

later in other parts of the country. In February of the year the

company made De-merger of the Company's New Drug

Discovery Research (NDDR) Unit into a subsidiary, Ranbaxy

Life Science Research Ltd. (RLSRL). As on April 2008 the

Company has received final approval from the U.S. Food and

Drug Administration to manufacture and market Cetirizine

Hydrochloride Oral Solution (Allergy) and Children's Cetirizine

Hydrochloride Oral Solution (Hives-Relief), 1 mg/ml (OTC),

Ranbaxy Laboratories Limited (Ranbaxy) and Orchid

Chemicals & Pharmaceuticals Limited (Orchid) entered into a

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business alliance agreement involving multiple geographies

and therapies for both finished dosage formulations and

active pharmaceutical ingredients. During the same month of

the year, the company has pierced into a collaborative

research agreement with the Department of Biotechnology

(DBT), New Delhi, in the area of New Drug Discovery

Research (NDDR). The research will be conducted under the

aegis of DBT's major initiative in the area of tuberculosis. The

Company has received authorization from Ministry of Health

and Labour Welfare (MHLW-Japan) for marketing the generic

version of Amlodipine tablets 2.5mg & 5mg and launched

BONISTA- Teriparatide injection (recombinant human

parathyroid hormone) for the treatment of Osteoporosis, in

collaboration with Virchow Biotech Pvt Ltd, Hyderabad, India.

Ranbaxy is the first company to launch this bio-generic

product in the world. The Company is serving its customers in

over 125 countries and has an expanding international

portfolio of affiliates, joint ventures and alliances, ground

operations in 49 countries and manufacturing operations in

11 countries. RLL working towards achieve excellence and

set new global benchmarks. Driven by its vision to become a

global leader the Company reinvents itself to achieve

sustained growth and leadership in Research-based

International Pharmaceutical.

RPG Enterprises

GlaxoSmithKline Consumer Healthcare Ltd.

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East India Pharmaceutical Works Ltd.

Dr. Reddy's Laboratories Ltd.

Cipla Ltd.

Concept Pharmaceuticals Ltd.

Khandelwal Laboratories Ltd.

Dabur India Ltd.

Company profile

Company Head Office / Quarters:A-11 Industrial Area Phase-III,Sahibzada Ajit Singh Nagar,

Mohali,Punjab-160055Phone : 91-172-2271450Fax : 91-172-2226925E-mail : [email protected] : http://www.ranbaxy.com

Registrars:Alankit Assignments Limited

2E/8Blazeflash HouseJhandewalan ExtnNew Delhi - 110055

PositionOn Tuesday September 16, 2008 the US Food and DrugAdministration (FDA) issued two "Warning Letters" to Ranbaxy

Laboratories Ltd, and simultaneously established an "ImportAlert" for drugs manufactured at or using materials from twoRanbaxy facilities in India at either Dewas or Paonta Sahib. Thismeans that any finished product and any active pharmaceuticalingredient manufactured at these sites that are offered forimport into the United States will be detained at the border.

The reason for these actions are problems at the Ranbaxyfacilities related to the firms drug manufacturing processes,

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mailto:[email protected]://www.ranbaxy.com/http://www.ranbaxy.com/mailto:[email protected]


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where significant deviations from Good Manufacturing Practices(GMP) have been documented in the manufacture and controlof both finished products and active pharmaceutical ingredientsduring FDA inspections in early 2008.

These deficiencies form the basis of the FDA Warning Lettersand because of the extent and nature the GMP violations theImport Alert has been issued.

FinancialsRanbaxy was incorporated in 1961 and went public in 1973. Forthe year 2009, the Company recorded Global Sales of US $1519 Mn. The Company has a balanced mix of revenues fromemerging and developed markets that contribute 54% and 39%respectively. In 2009, North America, the Company's largestmarket contributed sales of US $ 397 Mn, followed by Europegarnering US $ 269 Mn and Asia clocking sales of around US $441 Mn.

Management

Board of Directors

Dr. Tsutomu UneDr. Anthony H. Wild

Mr. Akihiro WatanabeMr. Percy K. ShroffMr. Rajesh V. Shah

Chairman: Mr. Takashi Shoda

CEO & Managing Director:Mr. Atul Sobti

Company Secretary:Mr. S. K. Patawari

Bankers:SBIICICICity bankPunjab National BankStandard Chartered Bank

Listed in NSE RANBAXY

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Listed in BSE 500359

Share holding pattern

Particulars

No. of

Shares(Mn)

%

Holdings

Total Promoter Holdings 268.7163.9

Total Govt Holding (Promoter + Non Promoter) 0.000.0

Total Domestic Institutions (Banks/ FI + MF /

UTI)

50.8712.1

Total Foreign Holdings (FII+NRI holdings) 38.359.1

Total Non Promoter Corporate Holdings 13.393.2

Total Public & Others (Individuals + HUF +

Clearing members)

49.4411.8

Total 420.75100

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IPO

SRL RANBAXY | Super Religare Labs ( laboratories ) is planning to

launch an IPO ( Initial Public Offering ) this fiscal . SRL Ranbaxy is owned by Malvinder Singh and Shivinder Singh, the

former promoters of Ranbaxy.

SRL Ranbaxy runs diagnostic labs all over the country. The companyplans to raise Rs. 200 Crores through IPO.

Company is valued at Rs.1000 Crores. IPO Date and Price is yet to beannounced.

Other diagnostic chains are Dr Lal Pathlabs, Metropolis and PiramalDiagnostics. US major Quest Diagnostics has also started operations in

the country. The industry is attracting investment from PE firms. SequoiaCapital and ICICI Ventutre have invested in Dr Lal Pathlabs andMetropolis, respectively.

SRL Ranbaxy has over 40 laboratories and 1,000 collection centresacross 450 towns and cities.

AnalysisMonthly Share Prices

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FPO The follow-on public offer (FPO) of state-owned Shipping Corporation of

India (SCI), which aims to raise Rs 1,300 crore, would come out onNovember 30.

According to the prospectus filed with market regulator the Securities andExchange Board of India (Sebi), the issue would close on December 2 forinstitutional investors and December 3 for retail investors, among others.

Last month, the government had approved selling its 10 per cent stake inSCI and allowed it to raise 10 per cent fresh equity.

The issue comprises of a fresh issue of 42.35 million shares and an offer forsale of another 42.35 million shares.

Post the stake-sale, the government's holding in the company will comedown to 63.75 per cent from the 80.12 per cent currently. The stake-sale

proceeds will be used to buy new vessels.

The company has drawn up a capex plan of $1 billion per annum for thenext three years. It has a strong balance sheet with Rs 2,400 crore cash anda debt-equity ratio of 0.45 and a current ratio of 2.97.


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Year High(Rs.) Low(Rs.) Close(Rs.) P/E High P/E Low P/E Close Mkt Cap.

(Rs. in Cr.)

Nov-10 624.90 530.50 571.45 50.39 38.98 43.12 24,060.33

Oct-10 620.55 560.00 579.75 48.63 41.56 43.75 24,409.79

Sep-10 579.90 490.00 557.15 44.73 36.37 42.01 23,441.53

Aug-10 500.60 434.55 490.25 39.06 32.10 36.97 20,626.78

Jul-10 467.95 441.10 449.30 35.81 33.19 33.88 18,903.85

Jun-10 463.00 414.35 460.60 35.32 31.13 34.73 18,639.44

May-10 469.50 364.20 429.85 36.27 22.72 32.41 18,082.07

Apr-10 485.00 432.70 443.10 37.28 32.50 33.41 18,639.44

Mar-10 491.60 450.00 474.90 38.50 33.21 35.79 19,970.49

Feb-10 476.00 395.10 467.05 36.56 29.06 35.20 19,640.39

Jan-10 533.50 432.35 453.15 42.11 32.04 34.15 19,055.86

P/E ratio increases constantly so it is good for

company.

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It shows good profitability of the company.

EPSCurrent year EPS is 13.61

Bonus

Dividend

Year End Dividend Per Share Dividend(%) Remark

21-May-08 6 120 Final

01-Nov-07 2.5 50 Interim

04-Apr-07 6 120 Interim2

02-Nov-06 2.5 50 Interim

15-Jun-06 0 120 Final

Live Project

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Date Ratio

01-Oct-02 3:5

01-Dec-98 1:1


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In above tables and graph we can see the

fluctuation in the price of the share and volume ofthe share.

As per available information we see that on 22nd

November 2010 closing price of share is 570.7 and

volume is 546.

Here in this script the price of Ranbaxy ltd. share

was decrease continuously in the given week, but

the volume is going high continuously. According to me volume is going high because

long term investor are starting to invest when price

decrease then sell it after long time period with

high rate of return.

TECHNICAL ANALYSIS

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Date Open High Low Close Total No of Trades Turnover

in(Rs.in Lakh)Price Price Price Price Volume

22-Nov-10 560.5 575.4 558.3 571.7 686,778 18,042 9,395.23

23-Nov-10 568 579.4 561.4 570.7 1,645,762 32,600 9,395.23

24-Nov-10 572 578.5 557.2 561 1,370,255 30,459 7,805.56

25-Nov-10 563 567 544.4 547.8 2,560,430 45,640 14,124.24

26-Nov-10 553 553 530.1 546 901,257 24,020 4,898.55


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Moving average analysis

DATECLS

PRICE SUM OF 5 DAY MOVING AVG

15-Nov-10 565.35

16-Nov-10 568.45

18-Nov-10 572.6

19-Nov-10 556.55

22-Nov-10 571.7 2834.65 566.3

23-Nov-10 570.65 2839.95 567.99

24-Nov-10 561 2832.5 566.5

25-Nov-10 547.8 2807.7 561.54

26-Nov-10 545.95 2797.1 559.42

A variation of the moving average is the moving average

convergence divergence, or MACD. It involves comparing a

short term moving average, here in above table 10 days

moving average is derived, if the short term moving average

is consistently higher then the long term moving average, it

is a bullish signal; if the short term moving average is

consistently lower than the long term moving average, and it

is bearish signal.

Here in this case the short term moving average of Ranbaxy

Ltd was consistently go down from 566.3 to 559.42. And as

per the technical analysis we can say that there is a bearish

signal for long term moving average.

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Niftymovement

related to

script

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For selected

period)

NSE

High 579.40

Low 530.05


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Share of Ranbaxy limited was consistently decreased in

above week.

Script of Ranbaxy industries was 570.7 on first day of

week and consistently decreases during week, and on the

last day of the week reach at 546.

And as per table we see below, that the nifty was also go

down consistently.

Conclusion

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Ranbaxy Ltd is an India-based company. The company is

India's private sector company on all major financial

parameters.

The company manufacture and markets, generic

pharmaceuticals, value added generic pharmaceuticals,

branded generics, active Pharmaceuticals (API) and

intermediates by using finest R&D and Manufacturing

facilities.

The share price of Ranbaxy ltd was decrease constantly in

given week.

In this particular week the nifty is also decrease

continuously.

EPS of Ranbaxy ltd was increased in 2010.

Price of Ranbaxy share was decrease in some last week

then also volume is increased of particular script because

long term investor invest in script when price decrease.

As per available information we see that on 22nd

November 2010 closing price of share is 571.7 and

volume is 546.

PAT is also increase and expected to increase in future.

As per analysis it is risky to invest in Ranbaxy ltd. for short

time.

ROE (return on equity) decrease in year 2010 in compare

to 2009.

Last bonus given in 2002 and 1998 respectively.

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Forecast for December end

Ranbaxy ltd.

As per analysis and findings, According to me Script

price was around Rs.580 at the end of December.

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Date Ratio

01-Oct-02 3:5

01-Dec-98 1:1

Ranbaxy Ltd.

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