Namit Final Accounts Presentation

8/8/2019 Namit Final Accounts Presentation

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FINANCIAL STATEMENT FINANCIAL STATEMENT

ANALYSIS ANALYSIS OF OF

RANBAXY LABORATORIES LIMTED RANBAXY LABORATORIES LIMTED

Presented by: -Amit Jhuraney (02)Dhruv Tuteja (07)Namit Gandhi (25 )Vikas Mann (59 )Sanjeev Shokeen (44 )

Gaurav Vasudeva (09 )


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CONTENTS CONTENTS

y F inancial OverviewF inancial Overview

yy Ratio AnalysisRatio Analysis

yy Cash F low AnalysisCash F low Analysis


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FINANCIAL OVERVIEW FINANCIAL OVERVIEW

INCREASE IN SALES:INCREASE IN SALES: - - Ranbaxy reflected a growth of over Ranbaxy reflected a growth of over 43% over the last 5 years from US $ 764 MN to around US $43% over the last 5 years from US $ 764 MN to around US $1.3 BN.1.3 BN.

INCREASE IN EXPORTS:INCREASE IN EXPORTS:- - E xport sales at Rs 27,176 Mn inE xport sales at Rs 27,176 Mn in2006 up from Rs 18,503 Mn in 2002 an increase of around2006 up from Rs 18,503 Mn in 2002 an increase of around43%.43%.

EARNINGS PER SHARE (Rs) EPSEARNINGS PER SHARE (Rs) EPS increased by over 14%increased by over 14%over the last 5 years due to increase in sales & exports.over the last 5 years due to increase in sales & exports.

EQUITY DIVIDENDEQUITY DIVIDEND increase by about 30% up from USincrease by about 30% up from US$2434 to US $ 3169. The main reason being highly perforative$2434 to US $ 3169. The main reason being highly perforativeglobal marketsglobal markets . .


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INCREASEINCREASE ININ R&DR&D EXPENDITUREEXPENDITURE: :-- There has been

increase in R & D expenditure over the last 5 years. The main re son being the manufacturing of APIs & Dosage forms which forms about 89%of companys sales. The other reason being development of Platformtechniques & Products in the area of Novel Drugs Delivery System.

GROWTH IN GLOBAL MARKETS:GROWTH IN GLOBAL MARKETS:- - During the year company performance was led by key markets of North America clocking in sales of US $ 391 Mn reflecting a growth of 18%, Asia garnering US $ 367 Mnwith a growth of 19% & E urope registering US $ 332 Mn reflecting agrowth of 23%. While Rest of the World contributed US $ 133 Mn to theoverall formulations business at US $ 1332 Mn.


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RATIO ANALYSIS RATIO ANALYSIS

y One of the important tool of financial statement analysis is financialratio analysis

y F inancial ratios may be divided into five broad categories:y Liquidity ratiosy Leverage ratiosy Turnover ratiosy Profitability ratiosy Valuation ratios


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TYPES OF FINANCIAL RATIOS TYPES OF FINANCIAL RATIOS

y Liquidity Ratios

y Leverage Ratios

y Turnover Ratios

y Profitability Ratios

y Valuation Ratios


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LIQUIDITY RATIOS LIQUIDITY RATIOS

yy Current RatioCurrent Ratio

yy Quick RatioQuick Ratio


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LEVERAGE RATIOS LEVERAGE RATIOS

yy DebtDebt--equity Ratio (or Gearing Ratio)equity Ratio (or Gearing Ratio)

yy Interest Coverage RatioInterest Coverage Ratio


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PROFITABILITY RATIOS PROFITABILITY RATIOS

yy Gross Profit Margin RatioGross Profit Margin Ratio

yy Net Profit Margin RatioNet Profit Margin Ratio


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PROFITABILITY RATIOS PROFITABILITY RATIOS

y Return on Capital Employed (ROCE)Return on Capital Employed (ROCE)

yy Return on EquityReturn on Equity


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TURNOVER RATIOS TURNOVER RATIOS

yy Inventory TurnoverInventory Turnover

yy

Debtors TurnoverDebtors Turnover

yy Average Collection PeriodAverage Collection Period

yy F ixed Assets TurnoverF ixed Assets Turnover

yy Total Assets TurnoverTotal Assets Turnover


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VALUATION RATIOS VALUATION RATIOS

yy PricePrice--earnings Ratioearnings Ratio

yy Market Value to Book Value RatioMarket Value to Book Value Ratio


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COMPARISON WITH INDUSTRY AVERAGES

Ratios Ratios 2005 INDUSTRY AVG 2005 INDUSTRY AVG

Liquidity Liquidity

Current ratioCurrent ratio 2.922.92 2.652.65 3.913.91

AcidAcid--test ratiotest ratio 1.60 1.421.60 1.42 2.102.10

Leverage Leverage

DebtDebt--equity ratioequity ratio 1.351.35 0.4330.433 0.600.60

Interest coverage ratioInterest coverage ratio 8.57 8.57 8.628.62 25.3325.33

Turnover Turnover

Inventory turnoverInventory turnover 4.164.16 4.0064.006 4.064.06

Debtors turnoverDebtors turnover 3.923.92 4.424.42 5.225.22

F ixed assets turnover F ixed assets turnover 2.772.77 2.972.97 1.121.12

Total Assets turnover 1.008 0.94Total Assets turnover 1.008 0.94 0.93 0.93

2006 2006


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Ratios 2006 2005 INDUSTRY AVG

Profitability

Gross profit margin ratio 12.61% 5.5% 16%

Net profit margin ratio 9% 6.2% 14%

ROCE 9% 6% 9.2%

Valuation

Price earnings ratio 36.99 34.32 29


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CASH FLOW ANALYSIS CASH FLOW ANALYSIS Op erating profit before working ca pital change in 2006 has increased by137% over previous year [Rs. 5687.50 mn against Rs. 2391.77 mn last yr].This increase in o perating profit is against almost 10% increase in sales,which indicates im provement in o perating profit margin in 2006 over last

year.

The com pany had invested Rs. 6259 mn in fixed assets during year 2005and again they have made additions in fixed assets by Rs. 2158 mn during 2006 i.e. Rs. 8417 mn in two years. Even if we exclude ca pital work in progress as on Dec 06 out of this of Rs. 3018 mn, the figure of asset put touse in two years is Rs. 5400 mn. However the increase in sales / incomeduring 2006 is only by Rs. 3742 mn.

There is 45% dro p in cash balance at the end of 2006 as com pared to cashbalance at the beginning of year [Rs. 623 mn against Rs. 1110 mn inbeginning]. This reduction is mainly in de posit which looks ok considering the fact that the return from business is at a higher rate than the bank de posit.


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The com pany has during current year invested Rs. 19171 mn insubsidiaries and other investments from borrowed funds of FCCBs,however corres ponding returns from this investment are not reflecting on income side.

While interest ex penses have more than doubled in 2006 mainly due toincrease in borrowings, the de preciation ex pense has almost remained same as last year des pite substantial increase in fixed assets


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Thank youThank you


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Namit Final Accounts Presentation