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Strategic Management

A

Project Report

On

Ranbaxy Laboratories Ltd.

Presented By :

Ghanshyam Gupta

[email protected]

Table of Content

1- Introduction

- Executive Summary

- Indian Pharmaceutical Scenario

- Segment of Indian pharmaceutical Industries

- Top pharmaceutical Companies

2- Introduction to Ranbaxy Laboratories Ltd.

- Formation



- Mission & Vision

- Trading

- Acquisition

- Top 20 Molecules

3- Market Information

- Worldwide sales contribution

- Market Share

- Major Competitors

- Marketing Strategy Of Ranbaxy Laboratories

4- Operations

- Manufacturing Facilities

- Supply Chain Management

5- Finance

- Financial Analysis

- Ratios

6- Human Resource Management

- HR Practices

- Conclusion

7- Awareness Programmes

8- Awards and Achievement

Executive summary

In this project, we have studied the strategies of Ranbaxy in all of its areas which have helped it

to achieve a globally distinct position in the global market. It has an integrated strategy which



takes care of all of its departments, which all work in a harmonious and integrated manner

to achieve the overall growth. The marketing strategies like co marketing, global approach,

innovation etc are followed which are well supported by the human resource and financial

practices.

INDIAN PHARMACEUTICALS SCENARIO

The Indian Pharmaceutical Industry today is in the front rank of India’s science-based industries

with wide ranging capabilities in the complex field of drug manufacture and technology.

The Indian pharmaceutical industry is the second-fastest growing industry sector in the country.

A highly organized sector, the Indian Pharma Industry is estimated to be worth $4.5 billion,

growing at about 8 to 9 percent annually.

It ranks very high in the third world, in terms of technology, quality and range of medicines

manufactured. From simple headache pills to sophisticated antibiotics and complex cardiac

compounds, almost every type of medicine is now made indigenously.

Playing a key role in promoting and sustaining development in the vital field of medicines,

Indian Pharma Industry boasts of quality producers and many units approved by regulatory

authorities in USA and UK.

Indian pharmaceutical interests in making a mark on the global scene got a boost when Dr.

Reddy's licensed two of its anti-diabetic molecules to Novo Nordisk and when Ranbaxy licensed

its Novel Drug Delivery System (NDDS) of ciprofloxacin to Bayer.

The Indian Pharmaceutical sector is highly fragmented with more than 20,000 registered units. It



has expanded drastically in the last two decades.

The leading 250 pharmaceutical companies control 70% of the market with market leader

holding nearly 7% of the market share.

It is an extremely fragmented market with severe price competition and government price

control.

The pharmaceutical industry in India meets around 70% of the country's demand for bulk

drugs, drug intermediates, pharmaceutical formulations, chemicals, tablets, capsules, orals and

injectibles. There are about 250 large units and about 8000 Small Scale Units, which form the

core of the pharmaceutical industry in India (including 5 Central Public Sector Units).

The Indian pharmaceutical industry is highly regulated. The Government controls prices of a

large number of bulk drugs and formulations. Profit margins of players vary widely in both

domestic and export sales due to many factors.

SEGMENTS OF INDIAN PHARMACEUTICAL INDUSTRIES

The pharmaceutical industries can be divided on basis of:-

— Form Application.

— Therapeutic Application.

On basis of form application it is classified as:-



— Bulk Drugs.

— Formulations.

TOP 10 INDIAN PHARMACEUTICALS COMPANIES

Ranbaxy

Dr. Reddy's Laboratories

Cipla

Ashwin Dalvi India

Aurobindo Pharma

GlaxoSmithKline

Lupin Laboratories

Sun Pharmaceutical Industries Mar 2007

Cadila Healthcare

Aventis

Ranbaxy Laboratories Limited

Introduction:

Ranbaxy Laboratories Limited (Ranbaxy), India's largest pharmaceutical company, is an

integrated, research based, international pharmaceutical company, producing a wide range of

quality, affordable generic medicines, trusted by healthcare professionals and patients across

geographies. Ranbaxy today has a presence in 23 of the top 25 pharmaceutical markets of the



world. The Company has a global footprint in 46 countries, world-class manufacturing facilities

in 7 countries and serves customers in over 125 countries.

Formation:

Ranbaxy was started by Ranbir Singh and Gurbax Singh in 1937 as a distributor for a Japanese

company Shionogi. The name Ranbaxy is a portmanteau word from the names of its first owners

Ranbir and Gurbax. Bhai Mohan Singh bought the company in 1952 from his cousins Ranbir

Singh and Gurbax Singh. After Bhai Mohan Singh's son Parvinder Singh joined the company in

1967, the company saw a significant transformation in its business and scale. His sons Malvinder

Mohan Singh and Shivinder Mohan Singh sold the company to the Japanese company Daiichi

Sankyo in June 2008.

Mission & Vision:

Ranbaxy's mission is to become a Research-based International Pharmaceutical Company.

The Company is driven by its vision to achieve significant business in proprietary prescription

products by 2012 with a strong presence in developed markets.

Trading:

In 1998, Ranbaxy entered the United States, the world's largest pharmaceuticals market and now

the biggest market for Ranbaxy, accounting for 28% of Ranbaxy's sales in 2005.

For the twelve months ending on 31 December 2005, the company's global sales were at US



$1,178 million with overseas markets accounting for 75% of global sales (USA: 28%, Europe:

17%, Brazil, Russia, and China: 29%). For the twelve months ending on December 31, 2006, the

company's global sales were at US $1,300 million.

Most of Ranbaxy's products are manufactured by license from foreign pharmaceutical

developers, though a significant percentage of their products are off-patent drugs that are

manufactured and distributed without licensing from the original manufacturer because the

patents on such drugs have expired.

In December 2005, Ranbaxy's shares were hit hard by a patent ruling disallowing production of

its own version of Pfizer's cholesterol-cutting drug Lipitor, which has annual sales of more than

$10 billion. In June 2008, Ranbaxy settled the patent dispute with Pfizer allowing them to sell

Atorvastatin Calcium, the generic version of Lipitor(R) and Atorvastatin Calcium-Amylodipine

Besylate, the generic version of Pfizer's Caduet(R) in the US starting November 30, 2011. The

settlement also resolved several other disputes in other countries.

On 23 June 2006, Ranbaxy received from the United States Food & Drug Administration a 180-

day exclusivity period to sell simvastatin (Zocor) in the U.S. as a generic drug at 80 mg strength.

Ranbaxy presently competes with the maker of brand-name Zocor, Merck & Co.; IVAX

Corporation (which was acquired by and merged into Teva Pharmaceutical Industries Ltd.),

which has 180-day exclusivity at strengths other than 80 mg; and Dr. Reddy's Laboratories, also

from India, whose authorized generic version (licensed by Merck) is exempt from exclusivity.

On 16 September 2008, the Food and Drug Administration issued two Warning Letters



to Ranbaxy Laboratories Ltd. and an Import Alert for generic drugs produced by two

manufacturing plants in India.

On 10 June 2008, Japan's Daiichi Sankyo Co. agreed to take a majority (50.1%) stake in

Ranbaxy, with a deal valued at about $4.6 billion. Ranbaxy's Malvinder Singh will remain CEO

after the transaction. Malvinder Singh also said that this was a strategical deal and not a sell out.

On February 25, 2009 the U.S. Food and Drug Administration said it has halted reviews

of all drug applications including data developed at Ranbaxy's Paonta Sahib Plant in

India because of a practice of falsified data and test results in approved and pending drug

applications. "Investigations revealed a pattern of questionable data," the FDA said.

Acquisition:

On June 11 2008, Daiichi-Sankyo acquired a 34.8% stake in Ranbaxy, for a value $2.4 billion.

In November 2008, Daiichi-Sankyo completed the takeover of the company from the founding

Singh family in a deal worth $4.6 billion by acquiring a 63.92% stake in Ranbaxy.

The addition of Ranbaxy Laboratories extends Daiichi-Sankyo's operations - already comprising

businesses in 21 countries For Ranbaxy, the deal frees up its debt and imparts more flexibility

into its growth plans the combined company is worth about $30 billion.

Top 20 Molecules of Ranbaxy Laboratories:

• Simvastatin



• AmoxiClav Potassium

• Isotretinoin

• Amoxycillin and Combinations

• Ciprofloxacin and Combinations

• Ketorolac Tromethamine

• Omeprazole and Combinations

• Cefuroxime Axetil

• Cephalexin

• Loratadine and Combinations

• Clarithromycin

• GinsengVitamins

• Diclofenac and Combinations

• Ranitidine

• Cefaclor

• Cefpodoxime Proxetil

• Efavirenz

• Atorvastatin and Combinations

• Fenofibrate

• Ofloxacin and Combinations

Market Information:

Team Size

Ranbaxy Sales



Total No. of Molecules

Ranbaxy + Local tie ups

Lead Molecules

About 2,500 persons

US $ 299 Mn

Market formulations based on more than 200 molecules

(including Fixed Dose Combinations)

Cephalexin (Sporidex), Ciprofloxacin (Cifran),

Amoxycillin (Mox), Ofloxacin (Zanocin), Atorvastatin

(Storvas), Ceftriaxone (Oframax), Cefpodoxime

(Cepodem), Co-amoxyclav (Moxclav), Cilanem

(Imipenem+Cilastatin), Volini (Diclofenac combination),

Silverex (Silver Sulphadizine), Cepodem (Cefpodoxime),

Verorab (Rabies vaccine)

Anti-Infectives, Cardiovascular & Diabetes,

Presence in Therapeutic Segments Dermatological, Neuro-Psychiatry, Pain management,

Gastro-Intestinal, Nutritional



Market Contribution (Worldwide):

Region

North America

Canada

European Union

United Kingdom

Germany

France

Romania

Rest of Europe

India

Asia Pacific (excluding India)

Russia & Ukraine



Africa

Latin America

Turnover (in US $ ) Year

2008

US $ 449 Mn

US $ 55 Mn

US $ 330 Mn

US $ 38 Mn

US $ 38 Mn

US $ 64 Mn

US $ 107 Mn

US $ 84 Mn

US $ 299 Mn



US $ 100 Mn

US $ 111 Mn

US $ 130 Mn

US $ 74 Mn

Major competitors-

Dr. Reddy's Laboratories

Cipla

GlaxoSmithKline

Lupin Laboratories

Cadila Healthcare

Aventis

Market share in India -

Ranbaxy is one of the leading pharmaceutical Companies in India commanding a market share of

around 5%.

Marketing Strategy-



Ranbaxy follows the CO-MARKETING strategy to promote its business and to introduce new

products. It helps the firm in two ways first it provide a large customer base and secondly it

decrease the competition as the firm do co-marketing with its competing company.hence this

strategy is very useful. Following are some of the examples of the companies comarketing

strategy.

Ranbaxy Laboratories Ltd in 2006, entered into a co-marketing agreement with Ferring

International of Switzerland for Desmopressin, which is used in treatment of urology-related

disorders.

According to a company statement, the drug would be useful for both paediatric and geriatric

patients.

Desmopressin, an original research product of Ferring International, is available in tablets and

sprays, and is currently marketed by the company's subsidiary in India.

This new co-marketing arrangement aims to leverage Ranbaxy's significant marketing and

distribution strengths to maximise patient coverage within the country. The product will be sold

under the brand name Adiuretin.

Mr Sanjeev Dani, Regional Director (India and Middle East), Ranbaxy, said: "This is a strategic

move by Ranbaxy to in-licence differentiated products for the Indian market." The Ranbaxy

scrip closed at Rs 393.75 on the BSE on Tuesday



Key Differentiator – Globalization

Ranbaxy was one of the first companies to make globalization the main plank of its strategy.

Starting with generics, Ranbaxy built up a global marketing network. At the same time Ranbaxy

developed strengths in Research & Development (R&D). The major competitive advantage is

the low cost of innovation. Thus Ranbaxy was able to give back to the international market the

same products they were used to, at much lower costs. Total vertical integration gave Ranbaxy

the edge it needed to make a mark in major markets like the USA.

Best Practice – Innovation

The key driver behind Ranbaxy's success is innovation and this is achieved with a similar

strategy that is used to market products – give people targets and motivate them. Ranbaxy has

time bound targets for research. It plans to have one New Chemical Entity (NCE) by 2012 with

several others in various stages of development. The Company has a mechanism to reward new

ideas. The research and innovation advantage that Ranbaxy enjoys today is the outcome of the

vision of Late Dr Parvinder Singh, Chairman & Managing Director, Ranbaxy. It was his dream

to make Ranbaxy “A Research Based InternationalOrganization”. It was his forward looking

approach which ensured that Ranbaxy was way ahead of the game in the Indian pharma industry.

Planned future:

The Company has continued its focus on internationalization with marketing efforts in the USA,

the UK, Brazil, China, Germany etc. The Company is now focused on changing the product mix

by reducing dependence on Anti-infectives and increasing the share of lifestyle\ related chronic



disease therapies. Ranbaxy also focus on internationalizing its operations aiming at building

privileged assets-brands, distribution channels, patents, etc. To further its growth plans, Ranbaxy

hasnot only taken the route of inorganic growth through acquisitions but it has also enhanced its

R&D spend and increased the level of investments for proprietary business

Integrated marketing strategy at South Africa-

Ranbaxy SA has also adopted an integrated marketing strategy to address the needs of Funders,

Prescribers and Dispensers. The objective is to build an enviable corporate image of Ranbaxy.

As a first step in this direction, the Company, early this year, organized a week long visit for a

high level delegation of 20 top customers from South Africa. The trip was a part of its pharmacy

and managed healthcare KOL program. The tour was an effort at building a personal rapport

with customers and exposing our state-of-the-art manufacturing and R&D units in India. Mr

Ramesh Adige, Whole-time Director, Corporate Affairs & Global Corporate Communications,

Ranbaxy, met the delegation inIndia and apprized them of Ranbaxy's global operations and

R&D. Ms Anneilze Getschmann, CEO, Chronic Care, during her visit to Dewas, expressed her

delight at seeing the Quality standards of manufacturing at Ranbaxy.

The Strategic Planning Process - Customer focus

The process always begins with the customers in mind: both external and internal - what they

want and what trends will impact them in the future. Accordingly they regularly deliberate

with internal customer departments like marketing , R & D and manufacturing to understand

their perspective on how best they can serve their external customers. This has resulted in



the provision of increasingly better service and products to customers delivered in the most

profitable manner. This has also helped in the speedy resolution of issues and pre-empt potential

ones.

Implementation

Ranbaxy's Quality management system is based on sound Quality policies and guidelines

which are implemented at all manufacturing sites all over the world. In Ranbaxy, Quality is

more than a regulatory Requirement; rather, it is a way of life that covers product development,

manufacturing, transportation and complaint handling. Also, quality aspects always take

precedence in our choice of business partners like contract / outsourced manufacturers, vendors

and CROs. Robust selection criteria are followed while implementing and maintaining a

meaningful and effective quality engagement with our partners.

Our special initiative on adopting a "Risk based approach" to all time readiness for any

inspection (ATR) has resulted in successful inspections of our manufacturing sites, from various

regulatory agencies, across the globe.the entire gamut of activities.

Providing the quality edge

Top management leads Ranbaxy's global quality system and the philosophy is prevention, not

detection. This quality culture is spread across the organization where everyone is a part of it.

Key benefits from this world class quality program are customer's satisfaction, getting it right

the first time and continuous improvement in products and processes. Under the leadership

of Dr Brian Tempest, the Quality evolution is continuing as Ranbaxy integrates quality into

the strategic planning process and begins operating at entirely new levels. Also, like in almost



any endeavor, quality is taken as a core value that sets the expectations for performance across

the company. It has also been recognized that Quality is a key factor for Ranbaxy to achieve

its mission. Based on the above principles, Ranbaxy's Quality team has been on a journey

to catapult the product development, manufacturing, transportation and complaint handling.

Also, quality aspects always take precedence in our choice of business partners like contract

/ outsourced manufacturers, vendors and CROs. Robust selection criteria are followed while

implementing and maintaining a meaningful and effective quality engagement with our

partners. Our special initiative on adopting a "Risk based approach" to all time readiness for any

inspection (ATR) has resulted in successful inspections of our manufacturing sites, from various

regulatory agencies, across the globe.

The strategic planning cycle-

The complete marketing strategy of Ranbaxy can be summarized in the following main points.

Focus on Internationalization

Major Markets: USA, Europe & BRIC (Brazil, Russia, India, China) countries

Move from Anti-infective segment to life-style related diseases

Focus on building privileged assets-brands, distribution channel, patents, etc

Inorganic growth through acquisitions in the US, Germany and India

Increased R&D spend

Increased investment in the proprietary business

Recommendations



Focus on the local market in India.

R & D in some new ailments like Swine Flu and bird Flu.

Develop more numbers of over the counter preparations.

More wide distribution network.

Operations

Manufacturing Facilities

Organizations’ capabilities and intent are strongly reflected in the product it manufactures. In

other words, the manufacturing competencies and facilities echo truly, the R&D extent and the

ability to implement it for the best of the market it targets.

Ranbaxy possesses the manufacturing strengths that have established it as a producer of World-

class generics, branded generics and a major supplier of its range of Active Pharmaceutical

Ingredients for pharmaceutical products of companies worldwide.

Ranbaxy has world-class manufacturing facilities in 7 countries namely ,Ireland, India, Malaysia,

Nigeria, Romania, South Africa and USA.

Its overseas facilities are designed to cater to the requirements of the local regulatory bodies

of that country while the Indian facilities meet the requirements of all International Regulatory

Agencies.

Some of the agencies such as MCA-UK, MCC-South Africa, FDA-USA and TGA-Australia,



have audited Ranbaxy’s manufacturing facilities for the compliance with international Good

Manufacturing Practices and have registered its products for safety, quality and efficacy.

Supply chain management

Ranbaxy's global supply chain is in line with the Company's 2012 global vision which

augments its commitment to meet customer's demands in the earnest.

In the highly competitive space of generic pharmaceuticals, efficiency is the key to survival.

Efficiency in reaching out to the customers across the globe within the stipulated time frame is

a challenge in itself. Ranbaxy, with its extending horizon, has taken up this challenge head on.

The Company has embarked on globalizing its supply chain in line with the best institutional

practices of the industry.

The Company launched a special project called SPECTRUM (Supply Chain Planning for

Enhancing Customer Service to Ranbaxy's Universal Markets) in 2003 with a clear objective

to, 'Transform the Supply Chain to substantially improve customer service levels whilst

maintaining optimal levels'. Over the last 26 months significant ground has been covered in

terms of implementing processes in different plants and markets across the globe. This effort

has been ably supported by deploying the APO (Advanced Planner Optimizer) tool. Following

its implementation, the supply chain has been converted into a seamlessly integrated end-

to-end function, starting from forecasting demand to meeting demand, in the most efficient

way. The tool helps manage each function separately from demand planning, supply planning,

procurement of input materials to logistics.

Thousands of Ranbaxy customers from more than 104 countries are served more than 4000



SKUs (Stock Keeping Units), manufactured either at Ranbaxy's manufacturing facilities spread

across the globe, or at various other outsourced locations including sourcing from several

Principal to Principal (P2P) vendors. Using thousands of input materials from a large number of

vendors makes Global Supply Chain (GSC) function that much more complex.

In line with global best practices the supply chain at Ranbaxy has evolved a seamless planning

process, which starts from forecasting demand for each market and ends with the delivery of

goods to the customer in full and at the required time. This process driven approach has helped in

substantially improving service to the end customer.

Ranbaxy provides services as per customer needs by bringing in many new products each year.

During 2004, over 700 SKUs were launched. A large number of products are filed in various

countries every year. Our Global Supply Chain ensures that these products are manufactured

well in time and reach the market on the day of the launch. GSC works relentlessly to ensure day

one launches of the generic formulations in advanced markets like USA & Europe.

The well defined KPIs (Key Performance Indicators) for each aspect of supply chain and

periodic review of these KPIs by the company's management, ensures that there is improvement,

month on month, and processes are strictly adhered to. The Global Supply Chain is supported

by SAP, which acts as the digital backbone of the chain providing on line information to the

customers and the organization.

In order to help service dynamic market requirements, technology is leveraged to ensure that

vendors get to know about the changes online and can track the movement of their consignments

till the time they are received by them.

To enhance Global Supply Chain capability RFID (Radio Frequency Identification)

technology was initiated in 2003. RFID is an advanced bar coding system and tracks the stocks

automatically. This was first implemented in the US in 2004 and soon will reach out to other



markets. The GSC team is geared up to take on the challenge of converting our Global Supply

Chain into a source of competitive advantage for the company while providing enhanced quality

service to customers.

Financial Analysis

Financial Year 2009

PROFIT BEFORE TAX OVER RS. 1000 CRORES;

GLOBAL SALES AT RS. 7344 CRORES

Consolidated Financial Performance for twelve months ended December 31, 2009

• Global sales were USD 1519 Mn (Rs. 73,441 Mn) *FY’08: USD 1,667 Mn; Rs.72,555 Mn+

• Profit Before Tax was USD 209 Mn (Rs. 10,098 Mn), a margin of 14% to sales *FY’08: USD

(320) Mn; Rs. (15,000) Mn]

• Profit After Tax was USD 64 Mn (Rs. 3,107 Mn), a margin of 4% to sales *FY’08: USD (198)

Mn; Rs. (9,349) Mn]

Consolidated Financial Performance for the quarter ended December 31, 2009 (Q4’09)

• Global sales were USD 482 Mn (Rs. 22,699 Mn), a growth of 25% over Q4’08 *Q4’08: USD

387 Mn; Rs.19,096 Mn]



• Profit Before Tax was USD 194 Mn (Rs. 9,389 Mn) *Q4’08: USD (242) Mn; Rs.(11,464) Mn+

• Profit After Tax was USD 54 Mn (Rs. 2,620 Mn) *Q4’08: USD (142) Mn; Rs. (6,798) Mn+

Financial Analysis-

Consolidated Financial Performance for the quarter ended

(Q3’09)-

September 30, 2009

•

Net sales were USD 356 Million (Rs. 17,205 Million),

(A de-growth of 18% over Q3’08)

Earnings before Interest, Tax, Depreciation & Amortization (EBITDA) was USD 45

Million (Rs. 2,221 Million),

(A margin of 13% to sales)

Profit before Tax was USD 33 Million (Rs. 1,601 Million).

Profit after Tax was USD 24 Million (Rs. 1,166 Million).

•

•



•

1) Sales or turn over

Year

2006

2007

2008

Amount(Cr)

4,058.7

4,184.5

4,481.3

Interpretation

In the above table, Amount (Crores) is the sales turnover achieved by the

company during the last three years.



The sales Turnover has increased from 4058.7 crore in the year 2006 to

4,481.3 in the year 08. When we compare the years 06 & 07 – the year2006

has the least turnover i.e., 4058.7 & 2008 has the highest turnover 4,481.3

2) Current ratio

Year

2007

2008

Ratio

44759.77 / 21327.31

=2.098707

66921.96/ 47438.41

= 1.41

Interpretation

In the above table, Current Ratio of the company for three years is depicted.



Current ratio=current assets/current liabilities

The Ideal Current Ratio is 2:1

If the company has ideal current ratio then it is assumed that its current assets are

sufficient to meet its current liabilities or its working capital is adequate.

3) Quick ratio

Year

2007

2008

Ratio

66921.96 - (19643.14) - (7729.39) /

44759.77 – (16408.6) – (7425.81) / 21327.31 (47438.41)

=0.981153272

=0.834

Interpretation

In the above table, Quick Ratio of the company for three years is depicted



Quick ratio = liquid assets / current liabilities.

The Ideal Quick Ratio is assumed 1:1.

The higher of the ratio shows the better ability of the company to discharge

its short term liabilities

When required ratio provides more stringent test of short term solvency

because liquid assets are more liquid than the current liabilities

PROFITABILITY RATIO

4) Gross Profit Margin Ratio

Year

2006

2007

2008

-



Ratio

14.98435

23.02159

12.74816

Interpretation-

In the above table, Gross profit margin of the company for three years is

depicted

Gross profit ratio= Gross profit /Net sales *100.

Higher the gross profitability ratio, higher the profit of business

From the above analysis of Gross Profit ratio, gross profit ratio is less compared to

the previous year

If the gross profit ratio is declining that may put the management in difficulty

5) Net Profit Margin Ratio-

Year



2006

2007

2008

Ratio

9.369995319

14.76197304

-23.3141429

Interpretation

In the above table, Net profit margin of the company for three years is

depicted

Net Profit Ratio=Net Profit/Net sales*100

The Net profit ratio reveals the operational efficiency and in efficiency

of the management of business



Since net profit ratio is declining that shows the inefficiency of management due to

recession and company made reserve on foreign exchange.

This ratio shows how much firm is earning net profit out of every rupee of revenue. It

is less due to recession exchange rate goes down so there was more loss and

Company can increase these ratio by increase by decrease in expenditure on the

operation.

6) Earnings per share

Year

EPS

2006

9.87

2007

15.22

2008



-24.85

Interpretation

In the above table, EPS (Earnings per Share) of the company during

the three years depicted.

EPS = Earning after tax - Preference dividend / No. of equity

shares

EPS is calculated by dividing the Earnings after Income Tax (EAIT),

which is available to Equity Share Holders, with the Number of

Equity Shares. EPS is used to measure the Profit to Equity Share

Holders on ‘Per’ Share Basis.

The year 2008 has the least EPS -24.85& 2004 has the highest EPS

28.26

7) Return on equity-

Year

Ratio

2007



7867.5/28022

=0.280762

2008

(9349.47) / 41205.88

=-0.23

Interpretation

Return on equity(NET WORTH) = RETURN / NET WORTH

Company is loss bearing. So he should reduce their cost.

In view of two year B/s company made reserve on foreign exchange

and fair valuation loss on derivatives.

8) Pay out ratio-

Total div. / net profit = 0

Interpretation



In the current year company had not made any provision for dividend so this is

0%

9) Assets turnover- Sales /Average Total Sales-

Year

Ratio

2007

41844.9/94075.52

2008

44814.3/134436.5

= 0.444801

=0.333349

10) Return on assets- PAT/ Average Total assets-

Year



2007

2008

Ratio

6177.2/

94075.5=6.5662

(10448)/

134436.5=(7.771698

9)

Human resource practices-

Ranbaxy Laboratories Limited one of the leading public sector undertakings, has successfully

implemented its Human Resource Management programme and has achieved worthwhile results.

The basic principle of Human Resource Management philosophy is the belief in:

• Human resources and its development;

• Optimum utilization of human resources;

• A harmonious balance between business strategy and Human Resource Management

strategy i.e., strategic planning and FIRM should go hand in hand.

Ranbaxy adopt the leading consultant Dr. M.B. Athreya's model of strategic management and



organization development. According to this model, OD & Human Resource Management

efforts may tend to be wasteful exercise, if there are no opportunities to utilize the development

of human capability. Similarly, all Strategic options in terms of business plans will remain

unfulfilled or paper projects at the most, if human resources are not made available to implement

them. The importance of Human Resource Management as a catalytic agent of growth has been

increasingly recognized in Ranbaxy Laboratories Limited.

The following three factors may be 5 considered while examining the recent Human Resource

Management efforts in Ranbaxy Laboratories Limited.

Competition in all areas of business operation has put considerable pressure on management to

improve productivity, quality and reduce cost. Success in this direction requires a dynamic FIRM

strategy.

The introduction of new computer- aided technology and fundamental change in the

manufacturing process has caused the need for developing new skills to suit the demand of new

technology.

To-day's better trained and better educated managers’ have stressed the emergence of new work

values where they have more opportunities to make contribution and to be recognized.

Human Resources are the most important assets in the organization.

Unlike other resources, human resources can be developed and increased to an unlimited extent.

A healthy climate, characterized by the values of openness, enthusiasm, trust, mutuality and

collaboration is essential for developing human resources.

Human Resource Management can be planned and managed in ways that are beneficial both to

the individual and organization.

Employees feel committed to their work and organization if the organization perpetuates a



feeling of belongingness.

Employees are likely to have this feeling of the organization if it provides for their basic needs

and for their higher needs through appropriate management styles and systems.

Employee commitment is increased with opportunity to discover and use one’s capabilities and

potential in one’s work. It is every manager’s responsibility to create a healthy and motivating

work climate and to set examples for subordinates to follow.

Ranbaxy believes in the motto ‘Putting people first’. In order to sustain its success and

renew its products, Ranbaxy has focused on the people behind its products and not on the

products themselves. The strategy framed by Ranbaxy is around core intellectual or services

competencies. Ranbaxy has focused on people, i.e., both employees and customers. The

strategy has been to recruit locally in host countries. The company has succeeded in creating

multicultural portfolio of human resource skills.

The training in the organisation shifted from mixed participant groups to work groups. This has

increased focus on people that create and perpetuate such knowledge.

As part of Ranbaxy’s ongoing commitment to produce high-tech quality drugs and

pharmaceuticals that cater to the specific needs of markets around the world, the company has

applied rigid quality measures at every stage of manufacturing at their plants. Good quality

remains the commitment of every employee at Ranbaxy: from careful selection and analysis of

raw materials to meticulous testing of finished products to meet stringent in-house standards that

go beyond the pharmaceuticals to ensure customer satisfaction. To meet growing international

business requirement, a programme to set up new facilities for the production of bulk drugs

pharmaceutical dosage from basic chemicals and intermediates has been under implementation

to fulfill its aim on quality. Chairman says, “At Ranbaxy, we are on corporate journey. It is

a long and winding road that has brought us from a domestic company with a few hundred

employees to one that now aspires to be a 6 international pharmaceutical company. Our mission



is clear and our values well articulated.

Analysis and conclusion

•

The human resource practices are complementary to the business strategies of the

company.

•

•

With advancement of technology new skills are developed in the employees.

Human resources are considered as most important asset of the company.

Awareness programmes by Ranbaxy-

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Anti-Tobacco Awareness Campaign

Blood Donation Camp

Ranbaxy Cares Camps Donation to Centurion Hospital.



Awards & Achievement-

NZBIZ Award- NZBIZ – the leading New Jersey business publication recognized Ranbaxy

as ‘one of the largest employers in the pharmaceutical industry in the State of New Jersey’ in its

June 2007 edition.

Packaging Development, R&D Wins The IPA Bilcare Award- Ranbaxy, for the second

time, has won the IPA Bilcare Award for its ‘Twin pocket nested pouch’ developed by R&D

packaging Team.

Team SAP gets CCC Certification - Ranbaxy's SAP Team (Team Diamond) was recertified

as CCC (Customer Competency Centre). This prestigious certification – for 5th year in a row – is

a testimony to the robust processes that have been put in place at Ranbaxy.

Pharma Excellence Award- In May 2007, Ranbaxy was awarded the Pharma Excellence

Award for ‘Leveraging Global Opportunity’ by the Express Pharma Group at a glittering

ceremony in Mumbai, India. Mr. Raghu Kochar, Director, Corporate Communications, Ranbaxy,

received the award from Mr. Kapil Sibal, Hon’ble Minister of Science and Technology,

Government of India.



Ranbaxy crowned with the ‘SAP ACE 2007 Award’- SAP India announced the second

edition of its annual awards for customer excellence – ‘SAP ACE 2007’. These awards, which

honor the Best Run Businesses that are setting global benchmarks in excellence, span across

three categories including: overall category, midsize category and small enterprises category.

Best Pharmaceuticals Supplier Award-

Ranbaxy was bestowed with the ‘Best Supplier of Pharmaceuticals Award’ for the second

consecutive year by the State Pharmaceuticals Corporation of Sri Lanka.

Water Management’ Award- Ranbaxy has always walked an extra mile to take

sustainability initiatives focused on resource conservation for protection of natural resources for

future generations.

Ranbaxy Bags ISO 9001:2000 & GDP – WHO Compliance Certification -Ranbaxy

has become the first Pharma company to achieve the ISO: 2000 and GDP-WHO compliance

certification for its distribution network.

Golden Peacock Award for Business Leadership-The Institute of Directors (IOD),

engaged in the fields of corporate governance, quality, environment protection and innovation,



conferred its prestigious 'Golden Peacock for Business Leadership' award on Mr. Malvinder

Mohan Singh. The award was given in recognition of Mr. Singh's vision behind the 'game-

changer deal' with Daiichi Sankyo Ltd, which will catapult the Ranbaxy-Daiichi Sankyo

combined entity to become the 15 largest pharmaceutical giant in the world.

ranbaxy proj

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