Cipla Presentation
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This document provides an overview of Cipla Limited, an Indian pharmaceutical company. It discusses the company's history, vision, products, competitors, global presence, achievements, revenue breakdown, PESTLE analysis, Porter's five forces analysis, SWOT analysis, and key financial ratios. Cipla was founded in 1935 and is now a leading player in anti-infective and anti-asthmatic formulations. It has 44 manufacturing facilities in India and does business in over 170 countries worldwide.
Cipla Presentation
- 1. ORGANISATION & MANAGEMENT Arun Kumar Bhagyashree Kashwed Chinthu Ramesh G.V.R Sruthi Sri Kartik Maniktala Kartikey Singh Kinay Dave
- 2. CONTENTS THE COMPANY PESTLE ANALYSIS PORTER 5 FORCES SWOT ANALYSIS
- 3. THE COMPANY • Founded by Khwaja Abdul Hamied as 'The Chemical, Industrial & Pharmaceutical Laboratories' 1935 • Make India self- reliant in healthcare VISION • Now a leading player in anti-infective & anti- asthmatic formulations Respiratory, cardiovascular disease, arthritis, diabetes, weight control, depression medicines COMPETITORS • Sun Pharma • Dr Reddy lab • Lupin • Aurobindo Pharma • Piramal • Glenmark • Pfizer • Merck • GSK
- 4. Currently Business in 170+ countries including the United States, Canada, Europe, Africa, Australia, Latin America and Middle East. 44 manufacturing facilities in India 1400 suppliers globally 2000+ products in 65 therapeutic categories and 60+ dosage forms, covering communicable, non- communicable, common and emerging diseases, and rare diseases. ACHIEVEMENTS • 1960s: Pioneers API(Active Pharmaceutical Ingredients) manufacturing in India, laying the foundation for bulk drug industry • 1968: Manufactured ampicillin for the first time in the country • 1970: Spearheads the New Patent Law, enabling Indian pharmaceutical companies to manufacture patented products • 2001: Pioneers access to HIV treatment by making anti-retrovirals (ARVs) available at less than a dollar a day • 2005: Produces an anti-flu drug in less than 3 months during the Bird Flu epidemic 40% 19% 20% 11% 4%6% Revenue Break up India North America SAGA Emerging Markets Europe Others
- 5. PESTLE SOCIAL Wider population in getting access to essential services in India Negative migration attitude towards India can impact Cipla’s ability to bring international leaders & managers With increasing liberalization the attitude towards health and safety are getting lax which Cipla needs to be careful of POLITICAL Stable Govt and major policies Regulatory Practices in India Other stakeholders - such as NGO, protest & pressure groups, activist movements play critical role. Taxation policies –Cipla has benefitted from lower taxation policies throughout for 2 decades Changes can affect company Political stability in other geographies ECONOMIC Indian pharma market expected to grow to USD 55 billion by 2020 Combination of value and volume provides interesting opportunities Increasing investment in public services Pricing controls & an economic slowdown can affect
- 6. TECHNOLOGY Intellectual property rights and patents protection R&D cost is high in India compared to western nations Technology has shortened the product life cycle and has enabled suppliers to quickly develop new products Technology transfer and licensing issues Lowering cost of production LEGAL Companies are finding it increasingly difficult to engage physicians and patients in an information intensive day and age India’s drug price control regime is erratic in its implementation. Government decides the price and companies have to implement it with immediate effect and grievances resolution takes time ENVIRONMENTAL Recycling is fast emerging as a norm rather than a good thing to do in India economy Regular scrutiny by environmental agencies in production and product design
- 7. PORTER 5 FORCES BUYERS Moderate Distribution Channel Govt control prices Fragmentation of buyer in the market - online, consolidated for hospitals Competencies & specialty - respiratory Loyal customer as prescription is used, high switching cost Low price sensitivity- Differentiated pdt SUPPLIER High Raw material marketing, labor can increase your cost Switching cost for companies is high – specifications Suppliers can form cartel Supplier can sell to other industry Chemical industry – forward integration Backward integration Depends on company size and revenue percentage SUBSTITUTES High Biosimilars Generic and Ayurvedic Substitutes leads to price erosion - competition Increases cost Less impact as people buy with prescription – online can disrupt
- 8. Easy entry for global players, but Indian companies have upper hand Drugs worth business of US$80 to 250 billion expected to go off-patent over next 10 years Difficult to create brand among doctors, hospitals Knowledge intensive Threat of new entrants is moderate NEW ENTRANTS Medicines spending in India is projected to grow 9-12 percent over the next five years R&D spending by other major players can increase 100% FDI allowed, low production cost Generic medicine competition from domestic & MNC’s, rising middle class households and improving medical infrastructure Very High COMPETITIVE RIVALRY
- 9. SWOT ANALYSIS STRENGTHS Strong R&D: 7.1% in R&D for development & improvements Products Range: APIs and formulations for humans and animal healthcare products. Over 2000 products in 65 categories with constant expansion. A foremost player in anti-infective and anti-asthmatic formulations Social initiatives: Cipla made breakthrough in reducing the prices of cancer drugs, providing quality at affordable prices WEAKNESS Lack of presence in developed countries: Presence in over 170 countries but India is major revenue generator Governance Issue : Company appointed new CEO in 2016 who changed decisions of the former, such future activities can affect performance ahead as in past
- 10. OPPORTUNITIES Strategic Expansion: Cipla is continuously looking for investments and acquisitions in India as well as in the abroad Treatment of HIV: Cipla offers a wide range of ARV products for the treatment of HIV/AIDS in both children and adults. Growing number of patients can provide opportunities Growth in Emerging markets: Cipla is focusing on growing in emerging markets, where medical infrastructure is improving THREATS Drug Pricing control methods in India: India has proposed a new pricing policy under Drug price control which can have a negative impact on the industry. Competition in generics industry: There is intense competition in the Indian generics industry whic affects growth potential Regulatory issues : Indian companies need USFDA regulatory approvals for facilities & observations given affect company sales Fluctuation in Exchange rates: International business is highly affected
- 11. RATIOS Particulars 18-Mar 17-Mar 16-Mar 15-Mar 14-Mar Basic EPS (Rs.) 18.25 12.13 18.21 14.71 17.29 Net Profit Margin (%) 12.89 9.05 12.06 11.65 14.8 Return on Networth / Equity (%) 10.4 7.61 12.2 10.65 13.76 Total Debt/Equity (X) 0.01 0.03 0.09 0.12 0.09 Asset Turnover Ratio (%) 66.62 68.99 79.51 66.69 72.58 Current Ratio (X) 2.91 2.48 2.19 1.83 2.11 Inventory Turnover Ratio (X) 3.75 4.06 4.15 3.08 3.74 Earnings Retention Ratio (%) 89.05 83.5 87.63 86.41 88.44 Price/BV (X) 3.1 3.72 3.43 5.15 3.06
- 12. Thank you