Professional Documents
Culture Documents
ON
“AMBALAL SARABHAI ENTERPRISES LIMITED”
By
V.Annapurna Devi
Reg.no: 09501E0002
Mrs.N. Ramanuja
(Asst Professor)
PLANT LOCATION
Location Product
Baroda Bulk Drugs and formulations
Naroda industrial estate,
Ahmedabad
BOARD OF DIRECTORS
Listing : The shares are listed on ASE, BSE and Delhi Stock Exchange
HISTORY
In 1977, 85 companies of the Sarabhai Group were merged and a new company called
Ambalal Sarabhai Enterprises Pvt Ltd was formed. These group companies were
originally formed by the group founder, Ambalal Sarbhai and after his death Vikram
Sarabhai took over the reins of the company. In the year 1971 Vikram Sarabhai passed
away and his brother, Gautam Sarabhai, took charge of the company.
In 1980 the company became a public limited company. Subsequent family disputes
betweenGautam Sarabhai and his nephews, Kartikeya and Suhrid adversely affected the
fortunes of the company which went off the dividend list in 1983-84.. Since 1995-96
series of steps have been taken to bring the company back on track. Kartikeya Sarabhai is
now the Chairman of the company
BACKGROUND
Ambalal Sarabhai Enterprises is the largest producer of Vitamin C in the country. The
company caters mainly to the domestic market. The company was also a market leader in
the veterinary healthcare sector but recently the unit was transferred to a separate joint
venture with Zydus Cadila. Amphotercin and Tetracycline are the other important
products of the company.
Nature of Business:
Manufacturer, Exporter
Major Markets:
PATTERN OF SHAREHOLDING
COMPETITORS
India’s pharmaceutical industry is one of the fastest growing sectors in the Indian
economy, having grown by 10% p.a. over past 5 years. The industry accounted for almost
2% of GDP in 2008, and employed almost 3 million people. The sector has emerged as
one of the strongest and most successful examples of knowledge-based industries in the
World and it has made significant progress in terms of development of technology,
products and infrastructure. The Indian pharmaceutical industry currently ranks fourth in
the world in terms of volume, with 8% global share. Its large pool of skilled technical
workforce, low production costs and government support has enabled its transformation
from an import-dependent country to a major exporting country.
Key findings
• Cipla leads the Indian pharma industry with a market share of 5.3%, representing
$411m in sales in 2008. The market is highly competitive and fragmented, with
the top 10 layers accounting for 36.1% of sales in 2008.
• The Indian pharma market will grow at a CAGR of 13.2% to reach a value of
$15.5bn by 2014.
• This growth will be driven by increasing disposable incomes, growing investment
in healthcare infrastructure and the introduction of product patent legislation.
• Ranbaxy is the second largest player in the Indian pharma market, with a share of
5% in 2008.
• Ranbaxy has a dominant position in acute therapeutic areas, particularly anti-
infectives, due to a robust product portfolio and regular product launches.
• Pharma companies are increasingly deploying their sales infrastructure towards
India’s rural areas. Pharma consumption is increasing in these areas due to the
rising purchasing power of the rural population, a relatively high prevalence of
serious ailments and recent government initiatives that have helped to increase
accessibility to medicines.
PROFITABILITY RATIOS
LEVERAGE RATIOS
LIQUIDITY RATIOS
PAYOUT RATIOS
Dividend payout Ratio (Net Profit) 0.00 0.00 0.00 0.00 0.00
Dividend payout Ratio (Cash 0.00 0.00 0.00 0.00 0.00
Profit)
Earning Retention Ratio 100.00 0.00 0.00 0.00 0.00
Cash Earnings Retention Ratio 0.00 0.00 0.00 0.00 0.00
The current ratio is mainly used to give an idea of the company's ability to pay back its
short-term liabilities with its short-term assets. The higher the current ratio, the more
capable the company is of paying its obligations. Here the current ratio is 0.56 from the
past 5 years decreasing year by year a ratio under 1 suggests that the
company would be unable to pay off its obligations if they came due at that point. While
this shows the company is not in good financial health, it does not necessarily mean that
it will go bankrupt - as there are many ways to access financing - but it is definitely not a
good sign.
Debt equity ratio less than 0.5 it is an indication where their equity is more than the debt
Fixed assets turn over ratio is 1.04 in 2005 and in 2009 it is 0.71 which is worse
indication for the fixed assets
Balance sheet of Ambalal Sarabhai Enterprises Ltd. for the last 5 years.
( ` in Million)
Particulars Mar 2009 Mar 2008 Mar 2007 Mar 2006 Mar 2005
SOURCES OF FUNDS
Share Capital 766.33 766.33 766.33 766.33 649.19
Share warrants & 0.00 0.00 0.00 0.00 0.00
Outstandings
Total Reserve -197.16 -301.78 -218.78 84.47 74.41
Shareholder's Funds 569.17 464.55 547.55 850.80 723.60
Secured Loans 41.64 122.79 387.31 204.34 475.81
Unsecured Loans 8.86 255.66 318.19 121.01 3.16
Total Debts 50.50 378.45 705.50 325.35 478.98
Total Liabilities 619.67 843.00 1253.05 1176.15 1202.57
APPLICATION OF FUNDS :
Gross Block 1100.45 1413.85 1465.07 1471.44 1487.52
Less: Accumulated 419.77 563.38 553.33 541.55 522.32
Depreciation
Less: Impairment of 0 0 0 0 0
Assets
Net Block 680.68 850.47 911.73 929.90 965.20
Lease Adjustment A/c 0 0 0 0 0
Capital Work in Progress 6.81 2.47 1.27 2.73 0
Pre-operative Expenses 0 0 0 0 0
pending
Assets in transit 0 0 0 0 0
Investments 410.98 411.22 681.62 302.11 329.08
Current Assets, Loans
Inventories 82.62 111.90 129.64 199.59 221.78
Sundry Debtors 226.33 362.63 311.83 324.41 551.65
Cash and Bank 113.19 106.78 68.34 197.98 79.97
Other Current Assets 0 0 0 0 0
Loans and Advances 544.74 1225.13 1220.09 1454.67 1080.07
Total Current Assets 966.88 1806.44 1729.91 2176.65 1933.46
Less : Current Liabilities
and Provisions
Current Liabilities 962.23 1723.63 1560.00 1738.49 1531.04
Provisions 483.44 503.98 511.48 498.50 497.66
Total Current Liabilities 1445.67 2227.60 2071.48 2236.99 2028.70
Net Current Assets -478.79 -421.16 -341.56 -60.34 -95.23
Miscellaneous Expenses 0 0 0 1.76 3.52
not written off
Total Assets 619.67 843.00 1253.05 1176.15 1202.57
Contingent Liabilities 276.01 241.20 192.85 174.69 120.78
Sales
(`. in Million)
Particulars Mar 09 Mar 08 Mar 07 Mar 06 Mar 05
No of Months 12 12 12 12 12
Gross Sales 646.04 668.34 1035.08 1286.69 1509.94
Compared to previous years their sales also decreased because their less consumption of
materials. They want to reduce their debt so the investment also decreased.
Moving of share prices for past 50 days as shown in the following table
DATE OPEN HIGH LOW CLOSE VOLUME
Graphical representation:
The shares are ordinary shares with the face value `10 .Total number of outstanding
shares is 76.63 million.
Total market capitalization value is `837.60 million.
By observing the graph we can say that there are sudden fluctuations in share moving
prices.
In the above data as I collected information from 26-07-2010 to 20-09-2010
On the first day the share value is r`11.52 and on 20-09-2010 the share value is `10.92
There is 5% change in these 50 days. Till now they didn’t pay the dividends to
shareholders
Beta: 1.37
Market Cap (Mil.): ` 837.60
Shares Outstanding (Mil.): 76.63
Annual Dividend: NA
Yield (%): NA
PE ratio 7.85
At present the net profit margin is -16.60% so compare to other firms it is not profitable
in their industry.
It’s EPS `1.42 compare to previous years it is in positive because from the past 5years it
is below `-3
Beta value is 1.37 when the beta value is more than 1 it is very sensitivity to market
prices.
CONCLUSION:
Finally by observing the reports Ambalal Sarabhai Enterprises is a little weaker than
other companies in the Industry. They are reducing their debts and they are not
concentrating to increase their sales because their over all costs are decreasing during the
inflation time. They are not giving any dividend it may a reason for the high systematic
risk But compare to previous years there is good result in EPS and share holding patterns.
Sooner it may get a good position in the industry