ORGANISATION

&
MANAGEMENT

Arun Kumar Bhagyashree Kashwed

Chinthu Ramesh G.V.R Sruthi Sri
Kartik Maniktala Kartikey Singh
Kinay Dave
 CONTENTS
 THE COMPANY
 PESTLE ANALYSIS
 PORTER 5 FORCES
 SWOT ANALYSIS
 THE COMPANY

VISION
• Now a leading player
• Founded by Khwaja Abdul in anti-infective & anti-
Hamied as 'The Chemical,
Industrial & Pharmaceutical
• Make India self- asthmatic formulations
reliant in
Laboratories' Respiratory, cardiovascular disease,
healthcare
arthritis, diabetes, weight control,
1935 depression medicines

COMPETITORS
• Sun Pharma
• Dr Reddy lab
• Lupin
• Aurobindo Pharma
• Piramal
• Glenmark
• Pfizer
• Merck
• GSK
 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
Revenue Break up
44 manufacturing
Currently facilities in India

1400 suppliers globally

2000+ products in 65 India
4%6%
therapeutic categories 11% North America
40%
Business in 170+ and 60+ dosage forms, SAGA
countries including the covering
Emerging Markets
20%
United States, Canada, Europe
communicable, non-
Europe, Africa, 19% Others
communicable,
Australia, Latin America
and Middle East. common and
emerging diseases, and
rare diseases.
 PESTLE

Taxation policies
POLITICAL Other –Cipla has
benefitted from ECONOMIC
Stable Govt and stakeholders - Combination
Pricing
lower taxation Indian pharma of value and Increasing
major policies such as NGO, controls & an
policies Political stability market volume investment in
protest & expected to economic
throughout for 2 in other provides public
pressure groups, grow to USD slowdown can
decades geographies interesting services
Regulatory activist 55 billion by affect
movements play opportunities
Practices 2020
in India critical role. Changes can
affect company

Negative migration attitude With increasing

Wider population in getting towards India can impact liberalization the attitude
SOCIAL access to essential services Cipla’s ability to bring towards health and safety
in India international leaders & are getting lax which Cipla
managers needs to be careful of
 TECHNOLOGY Technology has
R&D cost is high in India shortened the product life
Intellectual property Technology transfer and Lowering cost of
compared to western cycle and has enabled
rights and patents licensing issues production
nations suppliers to quickly
protection develop new products

LEGAL Government decides ENVIRONMENTAL

Companies are finding the price and
India’s drug price Recycling is fast Regular scrutiny by
it increasingly difficult companies have to
control regime is emerging as a norm environmental
to engage physicians implement it with
erratic in its rather than a good agencies in production
and patients in an immediate effect and
implementation. thing to do in India and product design
information intensive grievances resolution
takes time economy
day and age
 PORTER 5 FORCES

BUYERS Fragmentation Loyal customer SUPPLIER

Moderate of buyer in the as prescription Backward
market - online, is used, high High Switching cost Supplier can integration
consolidated for switching cost for companies sell to other
is high – industry Depends on
Distribution hospitals Raw material specifications Chemical company size
marketing,
Channel labor can industry – and revenue
Low price increase your Suppliers can forward percentage
Competencies sensitivity- cost form cartel integration
Govt control & specialty - Differentiated
prices respiratory pdt

Less impact as
SUBSTITUTES Substitutes leads people buy with
Generic and
Biosimilars to price erosion - Increases cost prescription –
High Ayurvedic
competition online can
disrupt
 COMPETITIVE RIVALRY NEW ENTRANTS

Very High Threat of new entrants is moderate

Generic medicine competition from domestic & MNC’s,

Knowledge intensive
rising middle class households and improving medical infrastructure

100% FDI allowed, low production cost Difficult to create brand among doctors, hospitals

Drugs worth business of US$80 to 250 billion expected to go off-patent over

R&D spending by other major players can increase
next 10 years

Medicines spending in India is projected to grow 9-12 percent over the next five years Easy entry for global players, but Indian companies have upper hand
 SWOT ANALYSIS

STRENGTHS
WEAKNESS
Strong R&D: 7.1% in R&D for development &
improvements

Lack of presence in developed

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
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
 THREATS
OPPORTUNITIES
Drug Pricing control methods in India: India has
proposed a new pricing policy under Drug price control
Strategic Expansion: Cipla is continuously which can have a negative impact on the industry.
looking for investments and acquisitions in India as
well as in the abroad
Competition in generics industry: There is intense
competition in the Indian generics industry whic affects
growth potential
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 Regulatory issues : Indian companies need USFDA
patients can provide opportunities regulatory approvals for facilities & observations given
affect company sales

Growth in Emerging markets: Cipla is focusing

on growing in emerging markets, where medical Fluctuation in Exchange rates: International business is
infrastructure is improving highly affected
 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 /
10.4 7.61 12.2 10.65 13.76
Equity (%)

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

3.75 4.06 4.15 3.08 3.74
(X)
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

Thank you