proposal of paneliya vishal & vala punit

7/29/2019 Proposal of Paneliya Vishal & Vala Punit

1/14

A

Research Proposal

On

FINANCIA PERFORMANCE ANALYSIS OF PHARMACEUTICAL

INDUSTRY IN INDIA

IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF THE AWARD

FOR THE DEGREE OF

MASTER OF BUSINESS ADMINISTRATION

In Gujarat Technological University

UNDER THE GUIDANCE OF

Mr.Nilesh Movalia

SUBMITTED BY

Vala Punit M. Enrolment No.:117220592023

Paneliya Vishal G. Enrolment No.:117220592002

K.K.Parekh Institute of Management Studies Amreli

Affiliated to Gujarat Technological University,

Ahmadabad


2/14

INTRODUCTION

The Indian pharmaceutical industry is the world's fourth-largest by volume and is

likely to lead the manufacturing sector of India.

The earliest pharmaceutical companies in India are Bengal Chemicals, East India

Pharmaceutical works limited, which still exist today as one of 5 government-owned

drug manufacturers. For the next 60 years, most of the drugs in India were imported

by multinationals either in fully formulated or bulk form.

The government started to encourage the growth of drug manufacturing by Indiancompanies in the early 1960s, and with the Patents Act in 1970. However, economic

liberalization in 90s by the former Prime MinisterP.V. Narasimha Rao and the then

Finance Minister, Dr. Manmohan Singh enabled the industry to become what it is

today. This patent act removed composition patents from food and drugs, and

though it kept process patents, these were shortened to a period of five to seven

years.

The lack of patent protection made the Indian market undesirable to the multinational

companies that had dominated the market, and while they streamed out. Indian

companies carved a niche in both the Indian and world markets with their expertise

in reverse-engineering new processes for manufacturing drugs at low costs.

Although some of the larger companies have taken baby steps towards drug

modernization.
http://en.wikipedia.org/wiki/Bengal_Chemicals_and_Pharmaceuticalshttp://en.wikipedia.org/wiki/Multinational_corporationshttp://en.wikipedia.org/wiki/Government_of_Indiahttp://en.wikipedia.org/wiki/P.V._Narasimha_Raohttp://en.wikipedia.org/wiki/Financehttp://en.wikipedia.org/wiki/Minister_%28government%29http://en.wikipedia.org/wiki/Dr._Manmohan_Singhhttp://en.wikipedia.org/wiki/Patenthttp://en.wikipedia.org/wiki/Patenthttp://en.wikipedia.org/wiki/Dr._Manmohan_Singhhttp://en.wikipedia.org/wiki/Minister_%28government%29http://en.wikipedia.org/wiki/Financehttp://en.wikipedia.org/wiki/P.V._Narasimha_Raohttp://en.wikipedia.org/wiki/Government_of_Indiahttp://en.wikipedia.org/wiki/Multinational_corporationshttp://en.wikipedia.org/wiki/Bengal_Chemicals_and_Pharmaceuticals


3/14

INDIAN PHARMACEUTICAL SCENARIO

The Indian pharmaceutical industry is one of the worlds largest and most developed

in terms of production volume and domestic consumption. Over the last 30 year India

has emerged as a major leader in generic drug production starting from almost non-

existence. Indian drugs are coveted all over the world for its high quality and low cost

generic drug manufacturer. The Indian pharmaceutical industry is characterized by

the twin benefit of strong domestic consumption growth on the one hand and robust

export opportunities on the other

Over the years the market has developed gradually, govt. reforms, change in

international markets, had led the industry as what we see today. Indias drug

industry is one of the fastest growing segments of the economy with an average 7-8

percent growth over the years. As per the forecast this growth momentum will

continue to move on and will touch 15% by the year of 2012.The top pharmaceutical

in India are below

RANK NAME

1 Ranbaxy

2 Dr. Reddys laboratories

3 Cipla

4 Sun pharma industries

5 Lupin Labs

6 Aurobindo Pharma

7 GlaxoSmithKline pharma

8 Cadila Healthcare

9 Aventies Pharma

10 IPCA Laboratories


4/14

REVIEW OF LITERATURE

1. Nagarajan and Burthwal(1990) in their research work entitled profitability andstructure: A firm level study of Indian Pharmaceutical Industry, intensively

examined the relationship between profitability and structure, using a sample of

thirty-eight pharmaceutical firms in India for the period 1970-1982. Two measures of

profitability i.e., ratio of net profit to total sales revenue and the ratio of net profits to

total assets have been used to find out the determination of profitability. The

coefficient of growth rate of sales was positive and significant, suggesting that

factors on the demand side of a firm had greater impact o profitability than on the

supply side.

2. Debasish Sur and kaushik Chakraborty (2006) in his study financialperformance of Indian Pharmaceutical Industry: The Indian Pharmaceutical

Industry has been playing a very significant role in increasing the life expectancy and

in decreasing the mortality rate. It is the 5th largest in terms of volume and 14th

largest in value terms in the world. The comparative analysis the financial

performance of Indian pharmaceutical industry for the period 1993 to 2002 by

selecting six notable companies of the industry. The comparison has been made

from almost all points of view regarding financial performance using relevantstatistical tools.

3. Prasad K.V.N, Ahmed Mubasherud din & Dr. Reddy D. Maheshw ara (2012)financial health of a company is a matter of concern for every stake holder of the

business. It is in fact the financial position of the company that drives the decision

making process of any stake holder. The present study attempts to analyze the

financial performance of three major pharmaceutical companies in India: Cipla Ltd,

Ranbaxy Laboratories and Dr. Reddy's Laboratories for the period 2006-10. The

study is based on fourteen parameters of the variables, Operational & Financial

Ratios, Performance Ratios, Growth Ratios and Financial Stability Ratios. The study

brings out the comparative efficiency of sample pharmaceutical companies.


5/14

STATEMENT OF THE PROBLEM

A research problem in general refers to some difficulty which a researcher

experience in the context of either a theoretical or practical situation or wants to

obtain a solution for the same.

Our research problem is Financial Performance Analysis of Pharmaceutical

Industry in India

RESEARCH OBJECTIVES

The objective of research is to discover answers to question through the application

of scientific procedures. The main aim of the research is to find out the truth which is

hidden and which has not been discovered as yet. Following are over research

objectives.......

To find out Financial performance of Pharmaceutical industry in India over the

year.

To find out Performance of company within industry.

To provide better source of information to investor for invest in

Pharmaceutical industry in India.

For Our knowledge creation.


6/14

HYPOTHESIS

Hypothesis is usually considered as the principal instrument in research. Its main

function is to suggest new experiments and observation.

H0: NULL HYPOTHESIS

HA: ALTERNATIVE HYPOTHESIS

H0: There would be no significance difference in the profitability performance of

Pharmaceutical industry.

HA: There would be significance difference in the profitability performance of

Pharmaceutical industry.

H0: Top 5 Pharmaceutical companies profit are not affect Pharmaceutical industrys

performance.

HA: Top 5 Pharmaceutical companies profit are affect Pharmaceutical industrys

performance.


7/14

RESEARCH DESIGN

There are three main research design described as

1) Exploratory Studies

2) Descriptive Studies

3) Casual Studies

We will use here exploratory research design because the main purpose of such

studies is formulating problem for more precise investigation or developing working

hypothesis from operational point of view.


8/14

SOURCES OF DATA / DATA COLLECTION

Collection of the data is an essential part of the whole project work, only the data collectionis not sufficient but to analyzed and interpret and present them in meaningful manner. There

are two sources of data

1) primary data

2) Secondary data

Secondary Data

We will use Secondary data of 5 years till 2012.

DATA COLLECTION METHOD

Journals ( Business standard, Business Today )

Annual Reports

Government publication

Publication of professional and research organization

Encyclopaedia News paper article

Investor annual report

Websites


9/14

POPULATION

Population

Our population for this study is Pharmaceutical industry of India.

Parameter of interest

Population parameters are summary descriptors of variable of interest of

population they are

1) Mean

2) Return

3) Revenue

4) Profit


10/14

SAMPLING METHOD

There are two types of sampling methods

1) Probability sampling

2) Non-probability sampling

We will use Non-probability sampling method there are three methods

1) Convenience sampling2) Snow ball sampling

3) Purposive sampling

a) Judgement sampling

b) Quota sampling

In Non-probability sampling method we will use Convenience sampling method.


11/14

SAMPLING FRAME

Sampling Frame

There are three sampling frame in our research

1) Top pharmaceutical companies

2) Middle pharmaceutical companies

3) Bottom pharmaceutical companies

We will use Top pharmaceutical companies as a sampling frame

Sampling Size

On basis of profitability,Top 5 Pharmaceutical Companies in India is our

sample size

1. Ranbaxy

2. Dr. Reddys Laboratories

3. Cipla

4. Sun Pharma Industries

5. Lupin Labs


12/14

RESEARCH TOOLS

We will use follow Research tools for data analysis they are given under:

1) ANOVA Test

2) Trend Analysis

TIME BUDGET

SR.NO. Work Duration

1. Literature review 14 Days

2. Data collection 23 Days

3. Analysis of data 18 Days

4. Interpretation of Data 15 Days

5. Preparing a rough draft 10 Days

6. Final Project report 10 Days

7. Total 90 Days


13/14

LIMITATIONS OF THE STUDY

Following limitations were encountered while preparing this project:

Limited Data:-

o This project has completed with annual reports; it just constitutes one

part of da ta co l le c t ion i .e . Secondary. There we re limitations

for primary data collection because of confidentiality.

Limited Period:-

o

This project is based on annual reports. Conclusions andRecommendations are based on such limited data. The trend of last

some year may or may not reflect position of the company.

Limited Area:-

o Also it was complex to collect the data regarding the competitors and

their financial information. Industry figures were also difficult to obtain.

Limited Time:-

o The Survey was conducted within the limited time frame because of the

short Time program so few short coming may be expected.


14/14

BIBLIOGRAPHY

Websites:

www.bseindia.com

www.nseindia.com

www.sebi.gov.in

www.rediffmoney.com

www.moneycontrol.com

Magazines:

Business standard

Business Today

proposal of paneliya vishal & vala punit

Documents