A

RESEARCH PROPOSAL
ON
AN IMPACT OF COVID-19 ON FINANCIAL
PERFORMANCE OF SELECTED HEALTH
SECTOR COMPANIES OF INDIA

THE DEGREE OF DOCTOR OF

PHILOSOPHY
UNDER THE FACULTY OF COMMERCE

SUBMITTED BY

SAGARKUMAR BHIKHALAL THAKKAR

(M.COM, NET)

SUBMITTED TO
DEPARTMENT OF COMMERCE
SAURASHTRA UNIVERSITY
RAJKOT
 INDEX
Sr.No. Title Page
No.

1 Introduction 3
2 Trend Analysis 3
3 Literature Reviews 4
4 Statement Of the Problem 5
5 Objective Of Study 5
6 Research Hypothesis 6
7 Period of the Study 6
- Types of Universe
- Sampling Unit
- Size of Sample

8 Types of Research 7
9 Data and Methodology 7
10 Tools and Techniques of Data Analysis 8
11 Tentative Chapter Plan 8
12 Significance and Scope of Study 9
13 Limitation of Study 9
14 Bibliography 10
 AN IMPACT OF COVID-19 ON FINANCIAL
PERFORMANCE OF SELECTED HEALTH
SECTOR COMPANIES OF INDIA
1. INTRODUCTION

Health sector is a category of stocks which is related to medical and health

care goods and/or services. This sector includes Hospitals, Medical devices,
Clinical trials, Health insurance, Medicines, diagnostic laboratories, nursing
homes, providers of health care plans and home healthcare and medical
equipments. Healthcare sector has become one of the India’s largest sectors
in both terms of capital expenditure and revenue. One can’t neglect services
and product of healthcare sector due to the fact that most of the medical
product and services are essential. Healthcare sector in India is getting more
attention and significance after Covid-19. In India, Biocon, Apollo hospital,
Sun Pharma, IPCA Lab, Aster DM Health, Fortis Health, Dr Reddy,s Lab
etc. are big player in healthcare sector in the terms of net sales and net profit.
After Covid-19 there is a high growth in collection of health insurance
premium. The premium collection by health insurance companies grew 40%
in July this year. Health sector grew significantly in the wake of the Covid-
19 crisis.
2. TREND ANALYSIS
Trend analysis is a technique used in technical analysis that attempts to predict the
future movements based on observed trend data. Trend analysis is based on the
idea that what has happened in the past gives an idea of what will happen in the
future. It shows changes over a period of time. Trend is the basic tendency of
production/services, sales, income, profit etc., to show growth or decline over a
given period of time. In healthcare sector trend analysis is important as it helps to
predicate at what rate growth or decline in sector will happen. Healthcare sector in
India has a 160 Billion $ market size in 2017 which is estimated to became 280
Billion $ in 2020 with a 16.28% CAGR. Major indicators has been used to analyze
the trend of financial performance are 1) Percentage of profit as return on capital
employed and 2) Percentage of dividend on equity capital employed.
 3. LITERATURE REVIEWS

In recent many research work and articles are published by researchers and
government agencies to show financial position of healthcare sector and
companies. The study of the past researches is useful to define the sphere of
our research. It saves time, energy and helps indirectly towards a particular
goal.

Hiral Desai (2015) in her paper attempts to know the solvency position of selected
pharmaceutical companies. The purpose of this study is to analyze the financial
performance in terms of solvency of the selected companies.
Neelam Rani, Surendra Yadav and P. K. Jain (2011) in their research examines
the short-run abnormal returns to India based mergers and acquisitions focusing on
the pharmaceutical industry during 2001-2007 by using event study methodology.
Short-term effects are of interests for immediate trading opportunities they create.
They found market perceives the deals of acquisitions of foreign targets by Indian
pharmaceutical companies as efficiency enhancing.
Amalendu Bhuniya’s (2010) study covers two public sector drug and
pharmaceutical enterprises listed on BSE. The study has been undertaken for the
period for 1997-98 to 2008-09. In order to analyze financial performance in terms
of liquidity, solvency, profitability and financial efficiency, various accounting
ratios have been used.
Ramesh Bhat and Nishant Jain (2006) in their article entitled “Financial
performance of private sector hospitals in India: Some further evidence” was
studied financial statement data of private hospitals for the years 1999 to 2004.
Using 25 key financial ratios, the study finds six key financial dimensions. The
findings suggest that over the years hospitals have shown marginal improvement in
financial performance
Amit K. Mallik, Debasis Sur and Debdas Rakshil (2005) in their article entitled
“Working capital and Profitability-A study on their relationship with reference to
selected companies in Indian pharmaceutical Industry” was studied for the period
for 1990-91 to 2001-02. They have assessed the influence of working capital on its
profitability.
Shankaran (2002) has made a study on Performance evaluation of Pharmaceutical
companies in India. He selected 10 companies for analysis out of which 5 were
Indian and 5 were MNCs. The financial performance has been analyzed with the
help of liquidity, profitability and solvency.
 4. STATEMENT OF THE PROBLEM
Recently The healthcare sector has seen drastic change in recent. Due to growth in
of awareness, literacy, urbanization, and situations after Covid-19, health sector
has seen quick growth in revenue and companies offering healthcare services and
goods have seen growth in their total revenue and net profit. There are several
other arguments, which thoroughly need empirical verification in the current
scenario with reference to Covid-19, to suggest what the financial position of
health sector companies was and also to suggest what it will it be in future?

5. OBJECTIVE OF THE STUDY

1. To know the growth trends in healthcare sector of India.
2. To assess past performance and current position of healthcare sector companies.
3. To predicate Net income and Growth prospects of healthcare sector companies.
4. To assess pre and post effects of Covid-19 on financial position of selected
healthcare sector companies.
5. To examine and compare financial position of selected health sector companies.
6. To find the conclusion on the base of study and make suggestion for the future
research.
6. RESEARCH HYPOTHESIS
A hypothesis is a precise, testable statement of what the researcher predict will be
the outcome of the study

Ho1: There is a no significance impact of Covid-19 on financial position of selected

healthcare sector companies.
Ha1: There is a significance impact of Covid-19 on financial position of selected
healthcare sector companies.

Ho2: There is no significance change in the financial ratios of selected health sector
companies.
Ha2: There is a significance change in the financial ratios of selected health sector
companies.
Ho3: There is no difference between net profits on total revenue over a time period
of selected health sector companies.
Ha3: There is a difference between net profits on total revenue over a time period of
selected health sector companies.

7. PERIOD OF STUDY

Data of Eight healthcare sector companies will be collected for the period of 10
years 2013-14 to 2022-23.

Types of universe: Universe can be finite or infinite for which data can be taken.
In finite universe no. of items are certain where in infinite universe no. of items are
uncertain. As here I have selected India’s 8 leading Healthcare sector companies,
so universe of this research is finite.
Sampling Unit: A sampling unit is a selection of a population that is used as an
extrapolation of the population. In our study sampling units are 8 different
healthcare sector companies.
Size of Sample: Sample size measures the number of individual samples measured
or observations used in a research. In this research we will collect samples from 8
healthcare sector companies listed below.

Sr.No. Company Name

1. Sunpharma industries Ltd.
2. Divi’s Lab.
3. Dr.Reddy’s Lab.
4. Cipla Health Ltd.
5. Biocon Ltd.
6. Aurobindo Pharma Ltd.
7. Cadila Healthcare Ltd.
8. Lupin Ltd.

8. TYPE OF RESEARCH
This research is basically comparative in nature. In Financial Analysis, the
researcher adopted the Comparative research design in the collection and analysis
of the data. This research aims at comparing financial performance of eight
healthcare sector companies and over a period of time. The study of financial
performance of eight healthcare sector companies in terms of profitability and total
revenue.

9. DATA AND METHODOLOGY

Data for this study largely depends on First source secondary database, which
includes financial statements and reports issued by the companies. The information
provided by the companies broadly contains Balance Sheet, Profit and Loss A/C,
and cash flow statements. We will also consider economic reports presented by
government and non government agencies. Data on health insurance can be
obtained from annual report prepared by IRDAI.
Financial analysis of companies to understand their financial position has
relied on financial accounting information and use of financial ratios, working
capital position and dividend policies of the companies. Financial ratios provide a
better picture of the financial performance of companies, as they are based on
relative performance and adjust for the differences in the size of organization.
These ratios can also useful to compare data over a time. Working capital of the
organization indicates its liquidity position where dividend policy indicates
organization’s consistency of profit and new opportunities of investment projects.

10. TOOLS AND TECHNIQUES OF DATA

ANALYSIS

Accounting Ratios: Accounting ratios are based on relative performance and can
adjust for the differences in the size of organization.
Mean/Average: A mean is a common tool used in equations and ratios. Average is
found by adding all numbers in the data set and then dividing by the number
of values in the set.
Standard Deviation: The standard deviation is a statistic that measures the
dispersion of a dataset relative to its mean and is calculated as the square
root of the variance.
Co-efficient of variations: The coefficient of variation (CV) is the ratio of the
standard deviation to the mean. It is used to measure the level of dispersion
around the mean.
Analysis of variance: The analysis of variance (ANOVA) is used to determine
whether there are any statistically significant differences between the means
of three or more groups. It is used is used when the researcher is comparing
multiple groups (more than two) because it can control the overall Type I
error rate.

11. TENTATIVE CHAPTER PLAN

In present research the following chapters will be prepared.
1. Introduction
2. Profile of companies selected for research in a lucid manner.
3. Financial Statement Analysis — An Overview.
4. Literature Review
5. The Analysis and Interpretation of data from the selected companies are
discussed.
6. Gives an idea of findings, suggestions, and conclusion over the topic
selected for the study.
7. Bibliography

12. SIGNIFICANCE AND SCOPE OF STUDY

Increasing competition and growing attention to the Indian healthcare sector has
necessitated the need to improve the performance for Indian healthcare sector.
Situations due to Covid-19 favors Indian health sector as India become self reliant
in many health sector goods and services. During Covid-19 Indian healthcare
sector companies got boost as they now export many drugs and equipments related
to healthcare sector to developed nations too.

i) Study of financial position of health sector companies with reference to

pre and post Covid-19, it will help to know significance of Indian health
sector in economy and we can also analysis growth and future of Indian
healthcare sector.
ii) Analysis of financial position of these companies will help in analyzing
the financial strengths and weaknesses and creditworthiness of
the Companies
iii) Financial statement analysis will be helpful to these companies
to review operating data and evaluate periodic business performance.
iv) Government agencies has authority to alter or modify present license and
export policies relating to health sector companies in which this research
work can contribute fruitful.
v) This research can be useful to stock holders, creditors, investors, and
market analysts to evaluate companies’ financial health and earning
potentials.
vi) This research can be used to government agencies like RBI and SEBI to
get a picture of healthcare sector companies in terms of financial
solvency.

13. LIMITATIONS OF STUDY

1) This study is confined to eight health sector companies’ financial
performance only. Results from study cannot be generalized on universe.
2) This study has been restricted to Secondary data, which were supported by
the companies’ records and reports presented by government and non
government agencies.
3) Accounting and statistics tools used for data analysis have their own
limitations that apply to this study also.
4) There may be different methods to measure financial performance of the
companies.

14. BIBLIOGRAPHY AND REFERENCES

1) Desai, Hiral, (2015), “Solvency Analysis of Selected Pharmaceutical
Companies in India”, GJRA - Global Journal for Research Analysis, Vol.
4, Issue 8, pp. 247- 249.

2) Amalendu, Bhunia, (2010), “Financial Performance of Indian

Pharmaceutical Industry – A Case Study”, Asian Journal of Management
Research, pp. 427-451.

3) Bhat,Ramesh.,Jain,Nishant.,(2006),”Financial performance of private

sector hospitals in India:Some further evidence”,IIMA Research and
Publications.

4) Mallik, Amit. K., Debasis, Sur and Debdas, Rakshit., (2005), “Working
Capital and Profitability: A Study on their Relationship with reference to
 Selected 5 Companies in Indian Pharmaceutical Industry”, GITAM
Journal of Management, Vol.3, Issue 2, pp. 51-62.

5) Sankaran, K., (2002), “Financial Performance Evaluation of

Pharmaceutical Companies in India”, Finance India, Vol. XVI, Issue 3,
pp.1059-1061

6) Mehta, R. M., (2008), “Dispensing Pharmacy”, 3rd Edition, Vallabh

Prakashan, Delhi.

7) https://shodhganga.inflibnet.ac.in/bitstream/10603/112279/15/9_ch-1.pdf

8) https://www.irdai.gov.in/ADMINCMS/cms/frmGeneral_NoYearList.asp
x?DF=AR&mid=11.1
9) https://www.ibef.org/industry/healthcare-
india.aspx#:~:text=Healthcare%20has%20become%20one%20of,health
%20insurance%20and%20medical%20equipment