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7/29/2019 Proposal of Paneliya Vishal & Vala Punit
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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
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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_Pharmaceuticals7/29/2019 Proposal of Paneliya Vishal & Vala Punit
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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
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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.
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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.
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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.
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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.
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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
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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
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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.
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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
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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
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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.
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BIBLIOGRAPHY
Websites:
www.bseindia.com
www.nseindia.com
www.sebi.gov.in
www.rediffmoney.com
www.moneycontrol.com
Magazines:
Business standard
Business Today