2010

Ranbaxy

International
Academy
of
Management Pawan Sharma
& PGPM/0911/033
Entrepreneurship 2009-2011
1|Page
 Ranbaxy
Topics

 Introduction
 Board of directors
 History
 Financial status
 Research & development
 Product
 Innovation
 Market
 Worldwide operation
 Strategy
 Vision & Aspiration
 SWOT analysis
 People
 Environmental Awards
 Current event

2|Page
 Just think you are having headache what is the
first thing you do? Take a tablet and feel relaxed after a
quick spam of time, right .Now think what if there wasn’t
any medicine to get relief from headache or any pain. What
would doctor’s prescribed to cure diseases .Thanks to those
who work so hard to save our world by making the medicines
.One of the company which has contributed its life is
Ranbaxy Laboratories Limited.

INTRODUCTION
Ranbaxy Laboratories Limited, India‟s largest pharmaceutical
company, is an integrated, research based, international
pharmaceuticals Company, producing wide range of quality, affordable
generic medicines, trusted by healthcare professionals and patients
across geographies. Ranbaxy exports it product to125 countries. The
company is ranked amongst the top ten global generic companies and
has presence in 23 of the top 25 pharama markets of the world. The
company with global footprint in 49 countries, world-class
manufacturing facilities in 11 & a diverse product portfolio, is rapidly
moving towards global leadership, riding on its success in world‟s
emerging & developed markets.

The CEO of the company- Malivinder Mohan Singh.

Board of Directors:-
At the helm of the entire operations is the experience and able direction
of the people who make it all happen. Ranbaxy acknowledges their
inspiring stewardship and indefatigable work.

Board of Directors
Left to Right : Mr. Ramesh L Adige,
Mr. Sunil Godhwani,
Dr P S Joshi, Mr. Vivek Bharat Ram,

3|Page
 Dr Brian W Tempest, Mr. Gurcharan Das,
Mr. Atul Sobti, Mr. Harpal Singh,
Mr. Malvinder Mohan Singh,
Mr. Surendra Daulet-Singh, Mr. Ravi Mehrotra, Mr. Shivinder
Mohan Singh, Mr. Vinay K Kaul, Mr. Nimesh N Kampani, Mr.
Vivek Mehra

HISTORY
Ranbaxy was started in by Ranjit Singh and Gurbax Singh in 1937 as a
distributor for a Japanese company Shionogi. Interestingly the name
Ranbaxy is a portmanteau word from the names of its first owners Ranjit
& Gurbakshi Bhai Mohan Singh bought the company in1952 from his
cousins Rangit Singh & Gurbax Singh. After Bhai Mohan Singh‟s son
Parvinder Singh joined the company in 1967, the company saw a
significant transformation in its business & scale.

Year Activity
1961 Company Incorporated
1973 Ranbaxy goes public

A multipurpose chemical plant is setup for the

manufacture of Apl‟s at Mohali in India
1977 Ranbaxy „s first joint venture in Nigeria is setup
1985 Research foundation is established

Stancore ,Ranbaxy 2nd pharmaceutical marketing

division starts functioning
1987 Production starts –up at the modern Apl‟s plant at
Punjab makes Ranbaxy the country largest
manufacturer of antibiotics
1990 Ranbaxy is granted its first us patent for Daxcyline
1992 Company enters into an agreement with Eli Lilly& Co.
Of USA for setting up a joint venture in India to market
select Lilly products.
1993 Company enters into an agreement to setup a joint
venture in china

Ranbaxy enunclates its corporate mission “to become a

research based international pharmaceutical company
1994 The new research centre at gurgaon (near Delhi )
becomes fully operational

4|Page
 Established regional HQ in UK & USA
1997 Ranbaxy laboratories Ltd. Crosses a sales turnover of
Rs.10, 000 million with its export reaching an all time
high of 5000 million.
1998 Ranbaxy enters USA, world largest pharmaceutical‟s
market with product under its own name.
Ranbaxy filled its First Investigational New Drug (IND)
application with the drug controller general of India
(DCGI) for approval to conduct Phase I clinical trials
1999 Bayer AG ,Germany & Ranbaxy sign an agreement
where Bayer obtains exclusive development &
worldwide marketing rights to an oral once daily
formulation of Cipro Floxacin, originally developed by
Ranbaxy
2000 Ranbaxy files its second IND application in India

Ranbaxy forays into brazil ,the largest pharmaceutical

market in south America
2001 Ranbaxy US crosses Sales of US$ 100 million, fastiest
growing company in the US.
2002 Ranbaxy files its 3rd IND application in India
2003 Ranbaxy receive The Economics Times Award for
corporate excellence for the company of the year

Ranbaxy & Glaxo smith kline (GSK)enter into a global

alliance for drug discovery & development
2004 Ranbaxy began operation in France as a top 10 generic
company, after acquiring a wholly owned subsidiary

The company joined the Elite club of billion dollar

companies, achieving global sales of US$ 1bm in
February 2004.
2005 Ranbaxy‟s antimalaria molecule successfully completes
proof of concept phase

It launches operation in Canada.

Ranbaxy receive India‟s first approve from USFDA for

an anti-retroviral (ARV) drug under the U.S. president
emergency plan for AIDS relief (PE$PFAR)

5|Page
FINANCIAL
Ranbaxy was incorporated in 1961 & went public in 1973.For the year
2007, the companyglobal sales at US$ 1619MN reflecteda growth of
21%profit after tax at US$ 190Mn registered an increase of 67% over the
previous year. The company has balanced mix of revenues from
developed & emerging markets & is well offered by these markets. For
the year 2007, North America, the company largest market contributed
sales of US$ 419 Mn, contributing 26% of total sales followed by Europe
garnering US$ 365Mn, The company‟s business in Asia was head by a
strong performance in India that clocked sales of US$ 301 Mn with
market leadership backed by its strong brand –building skills. Financials
Balance Sheet

6|Page
7|Page
8|Page
9|Page
Ten Years Status

10 | P a g e
(Rscrore) 2007 2006 2005 2004
Total income 4,376 4,005 3,612 3,732
PBT 993 639 303 764
PAT 623 386 231 547
Equity capital 187 186 186 186
Eps (Rs) 16.71 10.37 6.22 29.47

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
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.

11 | P a g e
 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.

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 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
 When required ratio provides more stringent test of short term
solvency because liquid asset is 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

12 | P a g e
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.
 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
ye a r

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.

13 | P a g e
 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
 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
14 | P a g e
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
 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) Earnings 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 = Earnings after tax - Preference dividend / No. of

equity shares

15 | P a g e
 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

Research & Development

Ranbaxy views its R&D capabilities as a vital component of its business
strategy that will provide the company with a sustainable, Long –term
competitive advantage .The Company today has pool of over 1,200
scientists engaged in path-breaking research.

Ranbaxy is among the few Indian pharmaceuticals companies in India to

have initiated its research program in the late 70‟s. To support its global
ambition, a first of its kind world class R&D centre was commissioned in
1994. Today, the Company‟s multi-disciplinary R&D center at Gurgaon,
in India, houses dedicated facilities for generics research & innovative
research. The company‟s robust R&D environment for both drug
discovery &development reflects the company‟s commitment to be a
leader in the generics space & offer value added formulations based on
its Novel Drug Delivery System (NDDS) & New Chemical Entity (NCE)
research outcomes.

The first research activity at Ranbaxy was initiated way back in the year
1973. Later when Ranbaxy drew its ambitious global plans, it embarked
on R&D in a significant way by establishing its first R&D centre in 1994.
The prowess of Indian scientist is widely acknowledge today & it is

16 | P a g e
believed that the cost of developing a new drug in India can be one third
to one fifth of doing the same, in the developed world. It is a long term
objective of Ranbaxy to build proprietary prescriptions, based on its
prowess in NDDS & NCE research.

PRODUCT

Using the finest R&D and Manufacturing facilities, Ranbaxy

Laboratories Limited manufacture & market generic pharmaceuticals,
value added generic pharmaceuticals, branded generics, active
pharmaceuticals,(API)and intermediates. The company remained
focused on ascending the value chain in the marketing of pharmaceutical
substance and is determined to bring increased revenues from dosage
forms sales.
Ranbaxy‟s diverse product basket of over 5000 SKUs available in over
125 countries worldwide encompasses a wide therapeutic mix covering a
majority of chronic & acute segment. Ranbaxy‟s top 10 products, ranging
from Anti-invectives to dermatological, account from revenues of over
US $600 Mn

INNOVATION

The new Drug research areas at Ranbaxy include anti-invectives,

inflammatory / respiratory, metabolic diseases, oncology, urology &
anti-malaria. Presently, the company has 8-10 programs compromising
one anti-malaria molecule in phases-II clinical trials. The company has
two programs in phase-I & the remaining in the pre-clinical stage. This
includes a collaborative research program with GSK.
The company‟s NDDS focus is mainly on the development of New Drug
Applications (NDA) /Abbreviated New Drug Applications (ANDAs) of
oral controlled-release products for the regulated markets. The
company‟s first significant international success using the NDDS
technology platform came in September 1999, when Ranbaxy out-
licensed its first once- a-day formulation to a multinational company.
Ranbaxy‟s in-house NDDS programs are primarily focused on the oral
segment. Inhalation (patented devices) & tr5ans-dermal (patented
adhesive polymers) programs are also being pursued through
collaborations.
In the oral NDDS space, Ranbaxy has already developed four platform
technologies namely Gastro Retentive, Modified matrix, Multiparticulate
& Aerogel, Several products leveraging these technologies have been
successfully developed.

17 | P a g e
Market analysis
In 1998, Ranbaxy entered the United States of America, the world‟s
largest pharmaceuticals market & now the biggest market of Ranbaxy,
accounting for 28% of Ranbaxy‟s sales in 2005.
For the twelve months ending on December 31st,2005,the company‟s
global sales were at US$1,178 million with overseas market accounting
for 75% of global sales (USA: 28%,Europe :17%,Brazil,Russia &
China:29%).For the 12 months ending on December 31,2006,the
company‟s global sales were at US$1,300 million.
Most of Ranbaxy‟s products are manufactured by license from foreign
pharmaceuticals developers, though a significant percentage of there
products are off-patent drugs that are manufactured & distributed
without licensing from the original manufacturer because the patents on
such drugs have expired. In December 2005, Ranbaxy‟s share was hit
hard by a patent disallowing production of its version of Pfizer‟s
cholesterol –cutting drugs Lipitor, which has annual sales of more than
$10 billion. On June 23, 2006, Ranbaxy received from the U.S. Food &
Drugs Administration a 180 day exclusivity period to sell simvastatin
(Zocor) in the U.S. as a generic drug at 80mg strength. Ranbaxy
presently competes with the maker of brand-name Zocor, Merck & Co.;
Teva Pharmaceuticals Industries, which has 180-day exclusivity at
strengths other than 80mg; & Dr. Reddy‟s Laboratories, also from India,
whose authorized generic version is exempt from exclusivity.

Market Price Data

Month Bombay Stock National Stock
Exchange Exchange
(High) (Low) (High) (Low)
Jan-09 257.70 161.15 257.70 165.10
Feb-09 244.00 159.65 244.00 159.25
Mar-09 169.00 133.15 168.85 133.10
Apr-09 202.20 160.00 202.00 160.00
May-09 286.40 167.60 286.45 167.50
Jun-09 311.80 242.70 312.30 242.55
Jul-09 289.95 236.00 298.60 236.00
Aug-09 348.00 257.00 346.00 257.40
Sep-09 417.80 312.10 418.60 312.20
Oct-09 419.40 362.05 419.50 362.05
Nov-09 460.75 374.00 461.80 374.10
Dec-09 538.00 454.00 538.45 455.10

18 | P a g e
Worldwide Operations
Global Pharma Companies are experiencing an ever changing landscape
ripe with challenges and opportunities. In this challenging environment
Ranbaxy is enhancing its reach leveraging its competitive advantages to
become a top global player. Driven by innovation and speed to market
we focus on delivering world-class generics at an affordable price. Our
people have consistently risen above all challenges maximized
opportunities and positioned Ranbaxy as a leader in the global generics
space. Ranbaxy‟s global footprint extends to 49 countries embracing
different locales and cultures to form a family of 51 nationalities with an
intellectual pool of some of the best minds in the world.

STRATEGY
Ranbaxy is focused on increasing the momentum in its key markets
through organic & inorganic growth routes. It continues to evaluate
acquisition opportunities in India, emerging & developed market to
accentuate its business & competitiveness. The company growth is well
speed across geographies with near equal focus on developed & emerging
markets. Ranbaxy has entered into new specialty therapeutic segments
like Bio-similars, oncology, peptides & limuses .These new growth areas
will add significant depth to its existing product pipeline.

The novel drug delivery systems (NDDS) research at Ranbaxy focuses on

maximizing the overall therapeutic & commercial value of commonly
prescribed pharmaceutical formulation by enhancing there performance
& reducing their adverse event profile .
Such innovation also helps to improve the overall patient convenience &
compliance.

19 | P a g e
PEOPLE
The company‟s business philosophy based on delivering value to its
stakeholders constantly inspires its people to innovate, achieve
excellence & set new global benchmark. Driven by its own vision to
become a global leader the company reinvents itself to achieve sustained
growth & leadership.
Driven by the passion of its over 12,000 strong multicultural workforce
comprising 50 nationalities , Ranbaxy continues to aggressively pursue
its mission to become a Research-based International Pharmaceutical
Company & attain a true global leadership position.

SWOT Analysis
Strengths
 Low cost of production.
 Large pool of installed capacities
 Efficient technologies for large number of generics.
 Large pool of skilled technical manpower.
 Increasing liberalization of government policies.
Weakness
 Fragmentation of installed capacities.
 Low technology level of capital goods of this section.
 Non-availability of major intermediaries for bulk drugs.
 Lack of experience to exploit efficiently the new patent regime.
 Very low key r&d
 Low share of india in world pharmaceutical production
 Very low level of biotechnology in india and also for new drug
discovery systems.
 Lack of experience in international trade.
 Low level of strategic planning for future and also for technology
forecasting.

Opportunities

 the global spread of ranbaxy and the blazing growth in business

provides ample opportunities for our employees to build careers in
various fields. Opportunities have never been a constraint for the
deserving. We believe 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

20 | P a g e
Vision & Aspiration
The company is driven by its vision to achieve significant business in
proprietary prescription products by 2012 with a strong presence in
developed markets. It aspires to be amongst the top 5 global generic
players & aims at achieving global sales of U.S $5Bn by 2012.

Mission & Values

Impact of services
RCHS operates in two types of service areas:

 Twilight Areas

 Intensive Areas

Twilight Areas (old service areas)

The twilight areas are the old service areas taken up as early as in 1998.
These areas comprise of 26 villages having a population of 61703. After
an initial period of intensive interventions, RCHS is continuing to
provide supportive services in these areas with the active participation of
trained community resources established by RCHS over the years in all
the villages.

21 | P a g e
RCHS programme in the twilight areas had a very positive outcome. As is
evident from the graph below, there is a steady reduction of birth rate
from 23 in 1998 to 15.1 per 1000 population in 2007. The infant and
maternal mortality rates have also declined substantially from 44.5 in
1998 to 20.7 per 1000 live births in 2007 and from 4.5 in 1998 to nil per
1000 live births in 2007 respectively. There results do not just speak
about the effectiveness of the programme but also about the
sustainability of its positive impact over a long period.

Intensive Areas
The intensive areas are the new areas taken up in 2004 with house to
house monitoring under the computerized Management Information
System (MIS). These areas comprise of 18 villages having a population
of 28665. These areas are visited once a week on a regular basis. As
evident from the bar charts given below, there is a significant
improvement in the general health profile of the community during the
last three years in respect of immunization, vitamin A, family planning
status, tetanus toxiod, coverage for delivered cases and malnutrition.
As far as vital indicators in the intensive area are concerned, the infant
mortality has declined from 48.9 in 2004 to 34.5 per thousand live
births in 2007. The maternal mortality rate has also come down from
6.3 per thousand live births in 2005 to nil in 2007.

22 | P a g e
Environmental Awards
Ranbaxy has not only proved them financially but with they proved that
they are also concerned with the Environment and the concerned area
was they perform. Due to which they have stolen awards such as:

 National Award for „Excellence in Water Management‟ from CII as

an „Excellent Water Efficient Unit‟ – for Toansa plant in year
2005.
 National Award for „Excellence in Water Management‟ from CII as
„Most Useful Presentation‟ – for Toansa plant in the year 2005.
 National Award for „Excellence in Energy Management‟ from CII
as an „Excellent Energy Efficient Unit‟ for Toansa plant in the
year-04
 Kirt Shiromani Award for „Best Safety Suggestion‟ by employees,
from Government of Punjab – for Mohali plant in the years 2004
and 2003.
 „Greentech Environment Excellence Silver Award‟ from Greentech
Foundation – for Toansa plant in the year 2003.
 National Award for „Outstanding Performance in Industrial
Safety‟ as Runner-Up in achieving „Lowest Average Frequency
Rate‟ – for Toansa plant in the year 2003
 ShramVeer Award for Best suggestion regarding safety
improvement, from Ministry of Labour, Government of India –
for Mohali plant in the year 2003.
 National Award for „Excellence in Energy Management‟ from CII
as an Excellent Energy Efficient Unit – for Toansa plant in the
year 2002.
 National Safety Award for 1st position for „Accident Free Period‟ –
23 | P a g e
 for Mohali plant in the year 2002.
 Merit Certificate for Largest Reduction in Frequency Rate of
Accidents in Chemical Industry (More than 5 Lakh man-hours
category) from Government of Punjab – for Mohali plant in the
year 2002.

Current EVENT
On June, 2008, Japan‟s Daiichi Sankyo Co., agreed to take a
majority (50.1 %) stake in Ranbaxy, with a deal valued at about $4.6
billion. DAIICHI and SANKYO have a long history in Europe. TAKASHI
SHODA is the president & CEO of the company. KIYOSHI MORITA is
the representative director & chairperson at DAIICHI SANKYO.
Malvinder Singh is still the CEO of the company even after transaction.
The existing management will still continue under CEO and MD,
Malvinder Singh. Singh also became a member of the senior global
management of Daiichi. Malvinder Singh also said this was a
strategically deal & not a sell out. Daiichi Sankyo, Japan‟s the second
largest drug maker acquired more than 50.1% of Ranbaxy for 737 rupees
a share.

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
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.

24 | P a g e
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.

25 | P a g e