Introduction

Ranbaxy Laboratories Limited, India's largest pharmaceutical company, is an

integrated, research based, international pharmaceutical company, producing a
wide range of quality, affordable generic medicines, trusted by healthcare
professionals and patients across geographies. Ranked 8th amongst the global
generic pharmaceutical companies, Ranbaxy today has a presence in 23 of the top
25 pharmaceutical markets of the world. The Company has a global footprint in 49
countries, world-class manufacturing facilities in 11 countries and serves
customers in over 125 countries.

Ranbaxy was incorporated in 1961 and went public in 1973. For the year
2008, the Company recorded Global Sales of US $ 1,682 Mn, reflecting a growth
of 4%. The Company has a balanced mix of revenues from emerging and
developed markets that contribute 54% and 39% respectively. In 2008, North
America, the Company’s largest market contributed sales of US $ 449 Mn,
followed by Europe garnering US $ 330 Mn. Business in Asia has been going
strong with India clocking sales of around US $ 300 Mn with market leadership in
several business segments, backed by strong brand-building skills.

In June 2008, Ranbaxy entered into an alliance with one of the largest Japanese
innovator companies, Daiichi Sankyo Company Ltd., to create an innovator and
generic pharmaceutical powerhouse. The combined entity now ranks among the
top 15 pharmaceutical companies, globally. The transformational deal will place
Ranbaxy in a higher growth trajectory and it will emerge stronger in terms of its
global reach and in its capabilities in drug development and manufacturing.

Company profile
Ranbaxy Laboratories Ltd. is the largest pharmaceutical company in India
and one of the world’s top 100 pharmaceutical companies. Ranbaxy is
specialist in the preparation of generic drugs; Ranbaxy is also one of the
world top 10 in that pharmaceutical category as well, with India's
agreement to apply international patent law at the beginning of 2005,
Ranbaxy has begun converting itself into a full-fledged research-based

1
pharmaceutical company. A major part of this effort has been the
establishment of the company's own research and development center,
which has enabled the company to begin to enter the new chemical entities
NCE) and novel drug delivery systems (NDDS) markets.

In November 2008, Daiichi Sankyo completed the acquisition of 63.92%

shares of Ranbaxy and in the process infused. The coming together of Ranbaxy
and Daiichi Sankyo is a path-breaking confluence that, in one sweep, catapults the
new, empowered entity to the status of the world's 15th largest pharmaceutical
Company. Individually, the two pharmaceutical giants are formidable - one, India's
largest generics Company and the other, among the largest innovator companies in
Japan.

Ranbaxy is a truly global operation, producing its pharmaceutical preparations in

manufacturing facilities in seven countries, supported by sales and marketing
subsidiaries in 44 countries, reaching more than 100 countries throughout the
world. The United States, which alone accounts for nearly half of all
pharmaceutical sales in the world, is the company's largest international market,
representing more than 40 percent of group sales. In Europe, the company's
purchase of RPG (Aventis) S.A. makes it the largest generics producer in that
market. The company is also a leading generics producer in the United Kingdom
and Germany and elsewhere in Europe. European sales added 16 percent to the
company's sales in 2004. Ranbaxy's other major markets include Brazil, Russia,
and China, as well as India, which together added 26 percent to the group's sales.

Vision & Mission

The Indian pharmaceutical industry is at the center stage in the global
Pharmaceutical arena and Ranbaxy is at the forefront in delivering the India centric
advantages to the advanced and developing countries of the world.

The Endeavour at Ranbaxy is to provide value. Value through pioneering work,

research & development and quality pharmaceuticals across the globe. Ranbaxy
keeps alive this Endeavour as it steps into the new millennium, and reaffirms its
commitment to the environment, the people and a healthier future.

Ranbaxy Laboratories Limited has excelled in its endeavor in drug research and
manufacture, providing quality products not only at par with global markets but
also facilitating the same.

2
Ranbaxy are committed to provide quality generics at affordable prices to the
patients worldwide with a view to help bring down the healthcare costs.
Companies grow from strength to strength in the global generic space in the years
to come. While the company continues to enhance the momentum of generics
business in over 125 markets, they are also accelerating drug discovery program
through collaborations and alliances.

Ranbaxy is driven by its vision to achieve significant business in proprietary

prescription products by 2012 with a strong presence in developed markets. The
Company aspires to be amongst the Top 5 global generic players and aims at
achieving global sales of US $5 Bn by 2012.

Company Strategies
For the year 2009, Ranbaxy has a clear strategy to harness its growth potential in
emerging markets, rebuild the US business through a series of actions on products
and facilities; actualize significant revenue upsides through First-to-File and Day-
1 launches strengthen the product / therapeutic pipeline and look for M&A
opportunities, complementing our geographic and therapeutic basket. Our focus
will be to resolve regulatory compliance issues and continue to strengthen cGMP
across all locations. Besides this, Ranbaxy and Daiichi Sankyo will identify key
projects to realize synergies at both the front and back ends of the business,
although, there will be much to contend with, considering that the industry is
projected to grow at around 5% in 2009.

Ranbaxy is focused on increasing the momentum in the generics business in its key markets
through organic and inorganic growth routes. The Company continues to evaluate acquisition
opportunities in India, emerging and developed markets to strengthen its business and
competitiveness. Growth is well spread across geographies with focus on emerging markets.
Ranbaxy has forayed into new specialty therapeutic segments like Bio-similars, Oncology,
Peptides and Limuses. These new growth areas will add significant depth to the existing product
pipeline.

Company Growth
 Consolidated net sales at Rs. 18,884 Mn, a growth of 14% (USD 431 Mn).
 Emerging markets portfolio achieves sales of Rs. 10,644 Mn, with a strong
growth of 20%; accounts for 56% of sales (USD 243 Mn).

3
  Developed markets sales grew by 9% to Rs. 7,089 Mn (USD 162 Mn);
accounts for 38% of sales.
 Earnings before Interest, Tax, Depreciation & Amortization (EBITDA) for
the quarter are Rs. 1,440 Mn (8%). EBITDA for the year to date is Rs. 7,253
Mn reflecting a margin to sales of 14%.
 Gross margin on year to date basis maintained at 51% despite adverse
economic conditions this year.
 Over the current year there has been a consistent improvement in Working
Capital management with a result that the Company’s Gross Working
Capital has reduced by 5%.

Competitors
The pharmaceutical industry is characterized by rapid advances in scientific
knowledge and ability to discover new drugs. The industry is therefore led by large
manufacturers and marketers of drugs investing heavily in research &development,
having clinical testing, marketing and distributing capabilities. Some of the main
competitors of Ranbaxy are:

• Sun Pharmaceuticals Industries - It is No. 1 in India in specialty therapy

areas like psychiatry, neurology, cardiology, gastroenterology, diabetology
and respiratory.[.It has brands in 30 markets worldwide and also has a
generic presence in the U.S. with Caraco Pharm Labs, Sun Pharmaceutical
Industries Inc
• Cipla - Cipla is a leader in the domestic retail pharmaceutical market. It also
exports raw materials, intermediates, prescription drugs, over-the-counter
products, and veterinary products to some 180 countries around the world.
• Glaxo smith Kline- It is one of the oldest pharma companies in India and
with a turnover of Rs. 1500 crore is one of the market leaders(market share)
in India with a share of 6.2 per cent Its main portfolios consists of anti-
invectives, dermatologicals and pain management drugs
• Dr.Reddy’s Laboratories It is a global pharmaceutical company with it's
headquarters in India and a presence in more than 100 countries. In India it
the biggest drug maker by sales.

Other competitors are Actavis,Sandoz International GmbH; Teva

pharmaceuticals,RPG Enterprises, , East India Pharmaceutical Works Ltd,
Concept Pharmaceuticals Ltd, Khandelwal Laboratories Ltd, Dabur India
Ltd.

4
Marketing Management
Introduction

 Marketing is the performance of business activities that direct the flow of

goods and services from producers to consumers."

 Dr. Marshall says “What we have is more strategic. Now it says marketing is
really something that makes the organization run."

 The impetus to examine the official definition, with an eye on possibly

rewriting it, came from AMA CEO Dennis Dunlap. Some members had
suggested it was time for update. Also, in the late '90s and several industries
thought leaders had noted the dramatic changes underway in marketing.

In Ranbaxy

The company’s advanced product development and manufacturing capabilities,

combined with a global sale and marketing network, make Ranbaxy an attractive
business partner. A key part of Ranbaxy business strategy is to collaborate with
partners with complementary skills – a mutually beneficial strategy for both
parties.

Sales and Marketing

Ranbaxy has set itself apart in the marketplace through the rapid expansion of its
product line and its willingness to emulate complex drug formulations. Ranbaxy
commitment to quickly expanding the breadth and depth of its product line has
been a key to its success in the marketplace.

To expand product lines with minimum investment, Ranbaxy provides turnkey

manufacturing services, including API and dosage form development, to allow
companies to focus on marketing and selling the product. This is an efficient way
to diversify product lines and increase profit margins, taking advantage of
Ranbaxy's manufacturing capabilities and expertise.

Ranbaxy has a commercial advantage as many of the high-profit branded drugs

with expiring patents over the next few years are in the categories where Ranbaxy
has proven expertise - anti-infective, gastrointestinal, cardiovascular and

5
analgesics.

Ranbaxy has a turnkey marketing group that works with other pharmaceutical
companies to co-market and co-promote a variety of chemicals and products. As a
marketing partner, Ranbaxy is able to meet the marketing needs of companies
while they themselves focus their efforts on a drug's development, manufacturing,
distribution and sales.

Marketing Strategies

Marketing Strategies is the department focused primarily on developing and

executing strategies for the promotion and distribution of branded, generic and
OTC products for Ranbaxy.

One of the key tasks for the department is to identify opportunities in different
markets and distribution channels and pursue those to developing and establish
new relationships in the marketplace. Managed Care and Internet marketing is
couple of key areas that the department is looking to introduce into its ever-
expanding service offerings.

Human Resource Management

Introduction

 HRM is concerned with the human beings in an organization. It reflects a

new Philosophy, a new out look, approach and strategy, which views an
organization’s man power, has its resources and assets.
 HRM is the managerial function which facilities the effective utilization of
people (manpower) in achieving the organizational and individual goals.

 HRM is the management function that helps the mangers to recruit, select,
train and develop the organizational members for the purpose of achieving the
stated organizational goals.

 HRM is a comprehensive managerial function, which is people, oriented,

task oriented, development oriented, future oriented, globally oriented and is a

6
continuous staff functions which is challenging.

 HRM performs managerial and operative functions to effectively utilize the

available human resources by developing their competencies in tune with
organizational requirements.

 HRM is the management of employee’s skills, knowledge, abilities, talents,

aptitudes, creative abilities etc.

 HRM is a strategic management function HRM is the central sub-system of

an organization and its permeates all type of functional management viz.,
production management, marketing management, financial management
HRM activities

 Human Resources Planning

 Recruitment, selection and placement
 Orientation, Training and Development
 Job Analysis and Design
 Role Analysis and role Development
 Career Planning and Career Development
 Motivation and Communication
 Performance Appraisal
 Human Relations
 Safety and Health
 Wage and Salary Administration
 Compensation and Reward
 Grievance Redressal
 Quality of work Life and Employee Welfare
 Organizational Change and Development

In Ranbaxy

Many Indian companies that perform well in domestic markets have not yet
expanded to the International arena. Several factors such as lack of confidence,
lack of technical know how and perhaps lack of resources inhibit leading Indian
groups to expand their area of activities to other parts of the world. HRM can play
a crucial role in changing the attitude of the company and its employees in order to
facilitate entry and presence in the foreign markets. This is effectively illustrated in

7
the case of the Indian pharmaceutical giant RANBAXY which succeeded in
expanding its business internationally due to the single-handed determination of its
past CEO, Dr. Parvinder Singh, and the manner in which he managed to change the
mindset of his employees
Ranbaxy inched upwards because the employees shared their CEO's belief and
dream that they were in a position to harness their resources and capabilities and to
be successful in foreign markets. Together they developed continual cross border
learning programs to enrich their ways of working and functioning. Furthermore,
they invited managers from other parts of the world to be present on their board.
This step enabled them to catalyze their globalization process. Moreover, the CEO
firmly led the company to integrate backwards, to enter new markets and to
develop novel drugs. This provided with the edge to succeed in the global
marketplace.

In the knowledge driven pharmaceuticals industry, human capital plays a critical

role in the success of an organisation.At Ranbaxy, current and future growth is
primarily dependent on rich global talent pool. Organization responds to changing
times and develops the continuing agility required to remain successful. To achieve
this, company work hard to ensure that workforce is enabled, enriched and
energised. Values have been the driving force that sustains efforts. These are
reflected in the principles of Trustworthiness, Customer Responsiveness, People
Development, Performance Focus and Entrepreneurial Drive espoused throughout
the organization

Experienced and capable people joined the organisation, promising talent within
the Company was put through a planned development programme called LEAD.
These initiatives are designed to further strengthen our core operations and position
the Company on a stronger footing while experienced and capable people joined
the organisation, promising talent within the Company was put through a planned
development.

Other development programs are

• Total Rewards Strategy

• Global Appreciate Programme
• Fun@Work,

8
Life at Ranbaxy

A
career
at

Ranbaxy means an opportunity for ample learning & growth. It 0ffers

avenues to work across the globe along side the finest minds. The company
offers a challenging assignment, a world class working environment,
professional management, competitive salaries and stock options along
with exceptional rewards.

Opportunities

The global spread of Ranbaxy and the blazing growth in business provides ample
opportunities for employees to build careers in various fields. Opportunities have
never been a constraint for the deserving. The company believes in employee
growth that goes beyond vertical movements and change in designations. Potential
and performance are the pillars of career progression at Ranbaxy. A robust
development process supports this. Managers will generally have the opportunity
to live and work in different countries; such international experience will help
them better understand our complex business and grow both personally and
professionally.

Salary and Benefits

Salaries and other benefits in Ranbaxy are comparable with the best in the industry
and one can expect to be rewarded highly if the performance is consistently
outstanding.
Group Life Insurance, Medical Insurance and Pension plans are a few examples of
the benefits we provide to our employees and their dependents with adequate
financial protection on long term basis.

9
Stock ownership

The ownership in business is fundamental to personal progression,

company encourage you to take ownership of your investment stock
ownership is a part of the compensation for managers early in their career
at Ranbaxy you will see the business results straight in your pay slip.

Value and Activities

Corporate Social Responsibility (CSR)

As a global leader in pharmaceuticals Ranbaxy take pride not only in providing

products that enable people to live healthier and fuller lives, but also in giving back
to the society. At Ranbaxy, Corporate Social Responsibility and concern for
Environment, Health and Safety are a part of the corporate DNA.Reaching out to
the underserved rural communities and helping them overcome their challenges is
central to Ranbaxy's CSR philosophy.

Environment

As a socially responsible company, Ranbaxy has made an enduring commitment to

consistently set new benchmarks in environmental protection and workplace. The
Company is also deeply aware of its responsibility to deploy clean and green
technologies that help in providing a sustainable environment. This further builds
upon the already significant bond of trust and concern that it warmly shares with
the communities located in and around its operating facilities.

The Environmental Management System (EMS) at key API manufacturing

facilities at Toansa and Mohali, in Punjab, went through the annual surveillance

10
audit, by a leading external verifying agency both manufacturing facilities
conformed to all audit specifications and continued to remain ISO14001 complaint.
Notable progress was made towards achieving the defined environmental
objectives, programs and long-term goals. For further improving the wastewater
management, an Agitated Thin Film Dryer and Plate type Ultra Filtration were
added as incremental safeguards, at the Toansa API facility.

Health

Company always strives to make a meaningful impact on the quality of their lives
by bringing preventive, promotive and curative healthcare services to their
doorstep. Nearly three decades ago in 1979, Ranbaxy started its health care
initiatives in certain identified rural areas of Punjab. As the reach of the program
grew, the Ranbaxy Community Health Care Society (RCHS) was established in
1994. A novel idea of providing mobile health care outreach service for the poor
and underprivileged was initiated. The program today benefits nearly 2 lakh people
in 77 rural and urban slum areas in Punjab, Haryana, Himachal Pradesh, Madhya
Pradesh and Delhi. Today, six well equipped mobile health care vans with teams of
medics and paramedics are actively engaged in the delivery of health care to our
target population in these states. The issues addressed include maternal-child
health, family planning, reproductive health, adolescent health, health education
and AIDS awareness.

Safety
It is constant endeavour to scale up and better safety practices. A number of
initiatives were undertaken to enhance workplace safety. The emergency
preparedness was ensured through regular tabletop exercises and mock drills at all
our manufacturing facilities and R&D centres. At Toansa manufacturing facility,
the 'Fire and Safety Risk Assessment' and the 'Hazardous Area Classification' was
reviewed by third party specialists. The National Safety Council also conducted
external safety audits at Toansa and Mohali. A crossfunctional team of Corporate
EHS, Engineering and Facility professionals along with an external specialist
further undertook external safety audits at the Corporate Office. Extensive safety

11
training programs were also conducted by internal and external specialists at all
manufacturing facilities, including those managed by contract.

Financial Analysis and Interpretation

Analysis of financial statement is important aid to financial analysis. The focus of

financial analysis is on key figures in the financial statements and the significant
relationships that exist between them. The analysis of financial statement is a
purpose of evaluating relationship between component parts of financial statements
to obtain a better understanding of the firm's position and performance. The first
task of the financial analyst is to select the information contained in the financial
statements. The second step involved in financial analysis is to arrange the
information in a way to highlight significant relationship. The final step is
interpretation and drawing of inferences and conclusions. In brief, financial
analysis is the process of selections, relation and evaluation.

However, it is to be noticed that there is a basic limitation of the traditional

financial statement comprising the balance sheet and the profit and loss account
i.e., they do not give all the information regarding financial operation of the firm.
Accordingly ratios not only indicate the present position, they also indicate the
causes leading up to the large extent. For instance accounts ratio may indicate not
only the financial position and precautions but also the past policies and actions
they have caused.

Meaning and definition

Ratio Analysis is a powerful tool of financial analysis. A ratio is defined in

the Webster's new college Dictionary as "The indicated quotation of two
mathematical expressions and as the relationship between two or more things". In
financial analysis a ratio is used as an index or yardstick for evaluating the
financial position and performance of a firm.

The three basic financial statements viz. the balance sheet. the profit and loss
account and the statement of changes in financial position are playing a significant
role and most, management uses the information carried in these statement is used

12
by most, management, creditors, Investors and Debtors to evaluate about the past
performance and current position in order to predict future performance and
position of the firm

Interested group in ratio analysis

Users of the financial ratio analysis are many they are concerned with the
economic situation of the firm and predicting its future course basing on which
decisions are taken. The major groups of users are:

Management

Management can get an overall view of the financial operations and

conditions of the company, which enables them to plan and control the company's
activities more effectively. They are able to spot weakness of the company's
operations and can take correct action. Further more, it tends to restrain
management, as they are under pressure to maintain a favorable financial position.

Investors

Investors are concerned with the safety of their investment and the ability of
the company to earn profit and in turn the dividend they earn on their investment.
The Investor forms their own opinion as to the soundness of increasing in a
company. One way the investor from their opinion of the company’s earning
capacity is by computing earning per share.

Creditors

Creditors are interested in the company's ability to meet its financial

obligations. Those who have lent. the money for short period are more interested
in the company ability to repay the debt as and when it becomes due. In other
words, they are interested in the liquid position of the company, which can be
broadly measured by computing current ratio and quick ratio.

The long-term creditors are not only interested in company's ability to repay
but also in the ability of the company to realize profit on the capital employed.

13
 A creditor will be interested in ascertaining whether the company can
employ the funds loaned to it in such a way that it will able to meet current interest
obligation and repay the loan when it falls due. If a company earn less than what is
paid in the form of interest, it is not safe to lend money to the company.

Labours

Labour has an interest in the operating results and the financial strength of a
company. The remuneration of the worker must be generated from the company
revenues: Thus, the workers' wages, to a great extent, depend up on the success of
the firm. Frequently, labour unions use the information presented in the financial
statement as a basic for their demand for increase in wages. The past operating
performance of the firm, as well as its current financial position, is often studied to
measure the ability of the Firm to meet new wage commitments.

Various accounting ratios can be classified as follows

A) Traditional classification or statement ratio

Traditional classification or classification according to the statements from which
these ratios are calculated is as follows:

 Balance sheet or position statement ratios:

Balance ratios deal with the relationship between two balance sheet items,
example; the ratio of current assets to current liabilities or the ratio of
proprietor’s funds to fixed assets. Both the items must, however, pertain to
the same balance sheet. The various balance sheet ratios have been named in
the chart classifying statement ratios.

 Profit & loss a/c or Revenue/income statement ratios:

These ratios deals with the relation ship between two profit & loss account
items, example; the ratios of Gross profit to sales, or the ratio of net profit to
sales. Both the items must how ever, belongs to the same profit & loss
account; commonly used, are named in the chart classifying statement ratios.

 Composite/ mixed ratios or inter statement ratios:

These Ratios exhibit the relation between a profit and loss or in come
statement item and a balance sheet item, e.g., stock turnover Ratio, or the
Ratio of total assets to sales.

14
B) Functional classification or classification according to test:
In view of the financial management or according to the tests satisfied, various
Ratios have been classified as below:

 Liquidity Ratios:

These are the Ratios which measure the short term solvency or financial
position of a firm. These Ratios are calculated to comment up on the short term
paying capacity of a concern or the firm’s ability to meet its current obligations.
The various liquidity Ratios are current Ratio, liquidity Ratio and absolute liquid
Ratio. Further to see the efficiency with which the liquid resources have been
employed by a firm, debtor’s turnover and creditor’s turnover Ratios are
calculated.

 Long Term Solvency And Leverage Ratios:

Long term solvency Ratios conveys a firm’s ability to meet the interest costs
and repayments schedules of its long term obligations e.g.: debt equity Ratio and
Interest coverage Ratio and leverage Ratio.

 Activity Ratios:
Activity Ratios are calculated to measure the efficiency with which assets
are being turned over into sales, e.g.; Debtors turnover Ratio.

 Profitability Ratios:
These Ratios measure the result of business operations or overall
performance and effectiveness of the firm, e.g.; Gross profit Ratio, operating Ratio
or return on capital employed.
The various profitability Ratios have been given in the chart exhibiting the
classifications of Ratios according to test. Generally, profitability Ratios is
calculated. 1) In relation to sales, and 2) in relation to investments.

C) Classification according to significance or importance

15
 The Ratios have also been classified according to the significance or
importance. Some Ratios are more important than others and the firm may classify
then as primary and secondary Ratios.
The British Institute of management has recommended the classification
Ratios according to importance for inter-firm comparisons. For inter-firm
comparisons the Ratio may be classified as primary Ratios and secondary Ratios.
The primary Ratio is one, which is of the prime importance to a concern; Return on
capital employed is named as primary Ratio. The other Ratios e.g. the relationship
of operating profit to sales or the relationship of sales to total assets of the firm.

1) Sales turn over

year 2004 2005 2006 2007 2008

amount(cr) 3,865.86 3,727.05 4,218.98 4,344.39 4,676.21

Interpretation

 In the above table, Amount (Crores) is the sales turnover

achieved by the company during the last five years.
 The sales Turnover has increased from 3, 865.86 in the year 2004
to 4,676.21 in the year 08. When we compare the years 05, 06, 07 – the
year2005 has the least turnover i.e., 3,727.05 & 2008 has the highest
turnover 4,676.21

16
 sales turnover

2008

2007

year 2006 sales turnover

2005

2004

0.00 1,000.0 2,000.0 3,000.0 4,000.0 5,000.0

0 0 0 0 0

amount

2) Current ratio

year 2004 2005 2006 2007 2008

ratio 1.31 0.92 0.96 0.83 1.16

Interpretation

 In the above table, Current Ratio of the company for five years is depicted.
 Current ratio=current assets/current liabilities
 The Ideal Current Ratio is 2:1
 If the company has ideal current ratio then it is assumed that its current
assets are sufficient to meet its current liabilities or its working capital is
adequate.

17
 current ratio

1.4
1.2
1
0.8
ratio

current ratio
0.6
0.4
0.2
0
2004 2005 2006 2007 2008
year

3) Quick ratio

year 2004 2005 2006 2007 2008

ratio 0.92 0.98 1.03 0.97 0.86

Interpretation

 In the above table, Quick Ratio of the company for five years is
depicted
 Quick ratio = liquid assets / current liabilities.
 The Ideal Quick Ratio is assumed 1:1.
 The higher of the ratio shows the better ability of the company to
discharge its short term liabilities

18
 When required ratio provides more stringent test of short term
solvency because liquid assets are more liquid than the current liabilities

Quick ratio

1.05

0.95

0.9 Quick ratio

0.85

0.8

0.75
2004 2005 2006 2007 2008

4) Debt–Equity ratio

year 2004 2005 2006 2007 2008

ratio 0.05 0.43 1.35 1.38 1.05

Interpretation

 In the above table, Debt–Equity ratio of the company for five

years is depicted
 Debt–Equity ratio=External Equities or
Debts/Internal Equities or Equities
 The Ideal Debt–Equity ratio is assumed 1:1
 Debt–Equity ratio is taken as an indicator of the degree of protection
enjoyed by the outside creditors.

19
  The lower debt-Equity ratio expresses that there is greater claim of the
share holders over the assets of the company which is considered good
from the point of view of the company.

Debt equity ratio

1.6
1.4
1.2
1
ratio

0.8 Debt equity ratio

0.6
0.4
0.2
0
2004 2005 2006 2007 2008
year

5) Inventory Turnover Ratio

year 2004 2005 2006 2007 2008

ratio 4.26 4.11 4.39 4.42 4.07

Interpretation

 In the above table, Inventory Turnover Ratio of the company

for five years is depicted
 Inventory (stock) Turnover Ratio = Net Sales/
Average Inventory.

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  Inventory turnover Ratio indicates the efficiency of the firm in producing
and selling its product. Or the inventory/ stock turnover indicates the
efficiency of the firms inventory management.
 From the above analysis of the stock turnover ratio, stock Turnover
to the business is less comparing to the previous year turn over
turnover of RLL the present scenario is better utilization of stock in
to business.

Inventory turnover ratio

4.5
4.4
4.3
4.2
ratio

Inventory turnover ratio

4.1
4
3.9
3.8
2004 2005 2006 2007 2008
Year

6) Gross Profit Margin Ratio

year 2004 2005 2006 2007 2008

ratio 16.9 4.9 14.39 7.51 2.07

Interpretation

 In the above table, Gross profit margin of the company for

five years is depicted
 Gross profit ratio= Gross profit /Net sales *100.
 Higher the gross profitability ratio, higher the profit of business

21
  From the above analysis of Gross Profit ratio, gross profit ratio is
less compared to the previous year
 If the gross profit ratio is declining that may put the management in
difficulty

Gross profit margin

18
16
14
12
10
ratio

Gross profit margin

8
6
4
2
0
2004 2005 2006 2007 2008
year

7) Net Profit Margin Ratio

year 2004 2005 2006 2007 2008

ratio 13.81 5.78 9.07 14.33 -22.02

Interpretation

 In the above table, Net profit margin of the company for five
years is depicted
 Net Profit Ratio=Net Profit/Net sales*100
 The Net profit ratio reveals the operational efficiency and in
efficiency of the management of business

22
  From the above analysis of Net Profit ratio, net profit ratio is less
compared to the previous years
 Since net profit ratio is declining that shows the inefficiency of
management

Net profit margin

20
15
10
5
0
ratio

Net profit margin

-5 2004 2005 2006 2007 2008
-10
-15
-20
-25
year

8) Earning per share

year 2004 2005 2006 2007 2008

EPS 28.38 5.69 10.21 16.56 -24.85

Interpretation

 In the above table, EPS (Earnings per Share) of the

company during the five years depicted.
 EPS = Earning after tax - Preference
dividend / No. of equity shares

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 EPS is calculated by dividing the Earnings after Income
Tax (EAIT), which is available to Equity Share Holders, with the
Number of Equity Shares. EPS is used to measure the Profit to Equity
Share Holders on ‘Per’ Share Basis.
 The year 2008 has the least EPS -24.85& 2004 has the
highest EPS 28.38

Earning per share

40

30
20

10
ratio

Earning per share

0
2004 2005 2006 2007 2008
-10
-20

-30
year

Conclusion

 Ranbaxy recorded global sales of US$ 1,682 Mn in 2008, a 4% growth

over last year. Dosage Form sales constituted 93% of global sales during
the year as against 94% in 2007. Overseas markets constituted 80% of
the total sales of the Company

 Consistent depreciation of the rupee in 2008 and large exposure of the

Company’s business to the international markets has resulted in
substantial foreign exchange losses of Rs.10,856 Mn on forward covers
and loans.

 As a prudent measure to stay current in its accounting practices, the

Company adopted from October 1, 2008, Accounting Standard 30 on
“Financial Instruments: Recognition and Measurement” issued by the
Institute of Chartered Accountants of India. As a result, a net loss of

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 Rs. 7,702 Mn was recognized during the year basis the fair value
measurement principle suggested in the Standard.

 The total number of employees of the Company and its subsidiaries as on

December 31, 2008 stood at 12,174.

 In view of the losses incurred by the Company, no dividend has been

declared for the year ended December 31, 2008.

Suggestions

 The company has incurred loss in current fiscal year; company has to
make future plans in such a way that it is not repeated.

 The company has expanded globally but the company should take care of
the domestic market also.

 Investment plan has to be made keeping in mind the objective of the

company.

Ranbaxy Laboratories Limited being a pharmaceutical company in India

Declaration

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 I hereby declare that this company analysis report of RANBAXY submitted
by me to the department of business administration is a bonafide work undertaken
by me and it is not submitted to any other university or institution by any other
person for the award of any degree diploma /certificate or published any time
before.

Place:
Date: Name
(S.ROHIT MITRA)
(08311E0025)

Acknowledgement

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 I would like to express my gratitude to my guide Mr. Coca
Satyanaraya faculty in business management of SREENIDHI
INSTITUTE OF TECHNOLOGY AND SCIENCE for his
cooperation and valuable suggestion during the study
process. I also want to thank my HOD Dr.Y.Satyanarayana
for extending his help during my analysis.

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