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Ranbaxy Laboratories
Accounts presentation on Ranbaxy Laboratories-By: Aarshiya Nirula
Akanksha PadhaMonami PatelNatasha Mitra
MissionRanbaxy's mission is ‘Enriching lives globally, with quality and affordable pharmaceuticals.’.
1961 Company Incorporated India's largest pharmaceutical company Presence in 23 of the top 25 pharmaceutical
markets of the world The combined entity now ranks among the
top 20 pharmaceutical companies, globally
COMPANY OVERVIEW
Terapia (Romania) Be-Tabs (South Africa) Allen (Italy) Mundogen (Spain) Zenotech (India) Cardinal Drugs (India) Ochoa Labs (India) Biovel (India)
Key Acquisitions and Alliances Since 2006
1961-Incorporated as a Private Limited Company
1969 - Ist blockbuster brand Calmpose launched in India
1973 – Attains Public Limited company status (listed in Feb 1974)
2006 - Acquires leading Romanian pharma company Terapia and Be-Tabs pharmaceuticals,5th largest generics company in South Africa
2007 - Business World ranks Ranbaxy as the Most respected company in the pharma industry
Milestones
2008 - Ranbaxy partners with Daiichi Sankyo (DS) establishing a unique and powerful hybrid business model
2009 – Synergistic step with Daiichi Sankyo to launch Olmesartan
2010 – Ranbaxy delivers quarterly sales of over US $ 500 Million for the first time
2010-2011 - The Golden Jubilee Year – 50 Years of an inspiring, pioneering and historic journey!
Milestones
Investment valuation Ratios
March 06 March 07 March 08 March 09 March 10
Face value 5.00 5.00 5.00 5.00 5.00
Dividend Per Share 8.50 8.50 -- -- 2.00
Ratio analysis
Liquidity And Solvency Ratios
March 06 March 07 March 08 March 09 March 10
Current Ratio 0.96 0.83 1.16 1.18 1.40
Quick Ratio 1.03 0.97 0.86 0.89 1.60Debt Equity Ratio 1.35 1.38 1.05 0.85 0.83
Long Term Debt Equity Ratio
0.93 0.90 0.80 0.68 0.57
Liquidity Ratio
Management Efficiency Ratios
March 06 March 07 March 08 March 09 March 10
Inventory Turnover Ratio
4.39 4.42 4.07 4.05 3.95
Debtors Turnover Ratio
4.58 4.53 4.88 3.74 3.99
Total Assets Turnover Ratio
0.78 0.73 0.64 0.66 0.61
Turnover Ratio
Profitability Ratio
March 06 March 07 March 08 March 09 March 10
Operating Profit Margin(%)
15.17 9.31 5.39 13.62 22.35
Gross Profit Margin(%) 14.39 7.51 2.07 10.52 18.31
Net Profit Margin(%) 9.07 14.33 -22.02 11.72 19.74
PROFITABILITY RATIOS
COVERAGE RATIO
March 06 March 07 March 08 March 09 March 10
Interest Cover
9.51 3.19 1.29 15.24 22.22
Total Debt to Owners Fund
1.35 1.38 1.05 0.85 0.83
Financial Charges Coverage Ratio 11.33 4.46 2.35 18.99 26.44
COVERAGE RATIO
Earnings Per Share & Book Value
Earnings Per Share & Book Value
March 06 March 07 March 08 March 09 March 10
Earnings Per Share
10.21 16.56 -24.85 13.61 27.28
Book Value63.03 68.01 84.24 94.16 121.74
TREND ANALYSIS[Dec ‘06 – Dec ‘10]
Liquidity Ratio Trend
Dec '06 Dec '07 Dec '08 Dec '09 Dec '10 -
1,000
2,000
3,000
4,000
1,113 1,007
1,939 1,641
3,546
Working Capital (in Rs millions)
Dec '06 Dec '07 Dec '08 Dec '09 Dec '100.00
0.40
0.80
1.20
1.60
0.960.83
1.161.18
1.40
Current Ratio
Dec '06 Dec '07 Dec '08 Dec '09 Dec '100.00
0.40
0.80
1.20
1.60
1.03 0.97 0.860.89
1.60
Quick Ratio
Solvency Ratio Trend
Dec '06 Dec '07 Dec '08 Dec '09 Dec '100
0.4
0.8
1.2
1.6
1.35 1.38
1.05 0.8500000000000010.8300000
00000001
Debt Equity Ratio
Dec '06 Dec '07 Dec '08 Dec '09 Dec '100
5
10
15
20
25
9.51
3.19 1.29
15.24
22.22
Interest Coverage Ratio
Turnover Ratio Trend
Dec '06 Dec '07 Dec '08 Dec '09 Dec '100
1
2
3
4
5
4.39 4.42 4.07 4.053.95
Inventory Turnover Ratio
Dec '06 Dec '07 Dec '08 Dec '09 Dec '100
1
2
3
4
5
4.58 4.534.88
3.74 3.99
Debtors Turnover Ratio
Dec '06 Dec '07 Dec '08 Dec '09 Dec '100
1
2
3
4
5
2.12 2.082.14 2 2.13
Creditors Turnover Ratio
Profitability Ratio Trend
Dec '06 Dec '07 Dec '08 Dec '09 Dec '100
5
10
15
20
25
14%
8%
2%
11%
18%
Gross Profit Margin(%)
Dec '06 Dec '07 Dec '08 Dec '09 Dec '10
-25
-15
-5
5
15
25
9%14%
-22%
12%20%
Net Profit Margin(%)
Dec '06 Dec '07 Dec '08 Dec '09 Dec '10
-15
-10
-5
0
5
10
15
9%
14%
-13%
8%13%
Return on Assets(%)
Dec '06 Dec '07 Dec '08 Dec '09 Dec '10
-30
-20
-10
0
10
20
16%
24%
-28%
14%22%
Return on Equity(%)
Comparative Analysis
49,475
3,105
1,384
5,747
26,368
6,318
967
5,9195,304
893
6,478
22,596
5,672
1,149
9,393
26,287
0.00
10,000.00
20,000.00
30,000.00
40,000.00
50,000.00
Market Cap. Sales Turnover Net Profit Total Assets
Sun Pharma Cipla Dr Reddys Labs Ranbaxy Labs
CompanyMarch 2010
Market Cap.
(Rs. cr.)
SalesTurnover
Net Profit
Total Assets
Sun Pharma 49,474.93 3,104.70 1,383.80 5,747.47
Cipla26,367.94 6,317.98 967.12 5,919.16
Dr Reddys Labs
26,286.92 5,304.41 893.31 6,477.80
Ranbaxy Labs 22,595.60 5,672.10 1,148.73 9,393.11
252
1,381
1,271
1,089
0
200
400
600
800
1000
1200
1400
1600
Operating profit
Sun Pharma Cipla Dr Reddys Labs Ranbaxy Labs
Sun Pharma
Cipla Dr. Reddy
lab
Ranbaxy labs
252 1381 1089 1271
Operating Profit(in rs. Crores) March 2010
Operating profit is the measure of company’s earning profit from ongoing operations, equal to earning before deduction of interest payments and income taxes.
43
13
27
50
0
10
20
30
40
50
60
70
80
90
100
Earning per share
Sun Pharma Cipla Dr Reddys Labs Ranbaxy Labs
Sun Pharma
Cipla Dr. Reddy Labs
Ranbaxy labs
43 13 50 27
Earning per share March 2010
Earning per share is the company's profit divided by the number of common outstanding shares. It serves as an indicator of a company's profitability.
2.14 2.17
1.40
1.66
0
0.5
1
1.5
2
2.5
Current Ratio
Sun Pharma Cipla Dr Reddys Labs Ranbaxy Labs
Ranbaxy Sun Pharma
Cipla Dr. Reddy
1.40 2.14 2.17 1.66
Current Ratio March 2010
Current ratio measures a company's ability to pay short-term obligations. Current Ratio = Current Assets/Current Liabilities
1.521.57 1.60
1.91
0
0.5
1
1.5
2
2.5
Quick Ratio
Sun Pharma Cipla Dr Reddys Labs Ranbaxy Labs
Ranbaxy Sun Pharma
Cipla Dr. Reddy
1.60 1.52 1.57 1.91
Quick Ratio
The quick ratio measures a company's ability to meet its short-term obligations with its most liquid assets. The higher the quick ratio, the better the position of the company.Quick ratio = Liquid Assets/Current Liabilities
3.653.74
3.95
5.36
0
1
2
3
4
5
6
Inventory turnover ratio
Sun Pharma Cipla Dr Reddys Labs Ranbaxy Labs
Ranbaxy Sun Pharma
Cipla Dr. Reddy
3.95 3.65 3.74 5.36
Inventory Turnover Ratio
Inventory turn over ratio indicates the number of time the stock has been turned over during the period and evaluates the efficiency with which a firm is able to manage its inventory. [Inventory Turnover Ratio = Cost of goods sold / Average inventory at cost]
2.99
3.31
3.99
3.67
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
Debtors Turnover Ratio
Sun Pharma Cipla Dr Reddys Labs Ranbaxy Labs
Ranbaxy Sun Pharma
Cipla Dr. Reddy
3.99 2.99 3.31 3.67
Debtors Turnover Ratio
Debtors turnover ratio indicates the number of times average debtors (receivable) are turned over during a year.Debtors Turnover Ratio = Net Credit Sales / Average Trade Debtors
121.74
276.08
355.69
73.55
0
50
100
150
200
250
300
350
400
Return on Assets
Sun Pharma Cipla Dr Reddys Labs Ranbaxy Labs
Ranbaxy Sun Pharma
Cipla Dr. Reddy
121.74 276.08 73.55 355.69
Return On Assets ( ROA)
ROA is the indicator of how profitable a company is relative to its total assets.ROA = Net Income/Total Assets
April 2010,Daiichi Sankyo opted not to convert the warrants into equity shares. Hence, the said warrants stand lapsed and the amount of Rs. 73.70 per warrant aggregating to Rs.1,756.59 millions paid by DS has been forfeited and taken to the Capital Reserve Account.
On 1 July 2010, assets pertaining to its New Drug Discovery Research Centre (including fixed assets, intangibles, in-process developments) transferred to DS for an aggregate consideration of Rs. 1,449.85 millions. ◦ Rs. 210 millionother operating income for non-compete
fee ◦ Rs. 131.81millionother income included in profit on sale
of assets
Notes To accounts
Leases cancellable + non-cancellable operating
leases
◦ lease term - 3 to 17 years, subject to renewal at mutual consent
◦ lease rent expense recognised during the year amounts to Rs. 531.83 (previous year Rs. 482.99).
Notes To accounts
As at 31 December
2010 2009
Claims against the Company not acknowledged as debts, under dispute:
DPCO * 1,952.90 1,703.30
Letter of comfort on behalf of subsidiaries, to the extent of limits
2,450.84 4,656.88
Octroi tax matters ** 171.00 171.00
Other matters *** 187.30 190.71
Commitments, Contingent Liabilities and Provisions
Thank you