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General Overview - : Cipla LTD

Cipla Ltd. is an Indian pharmaceutical company established in 1935 that aims to make healthcare accessible to all through affordable medicines. It has over 26,000 employees and a presence in over 100 countries. Cipla has strong R&D capabilities with over 1,300 scientists and 6 R&D facilities. It has a diverse portfolio of over 2,000 products across 65 categories. Cipla focuses on expanding globally through strategic investments and partnerships while facing competition in India from major players like Sun Pharma and Lupin.

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95 views5 pages

General Overview - : Cipla LTD

Cipla Ltd. is an Indian pharmaceutical company established in 1935 that aims to make healthcare accessible to all through affordable medicines. It has over 26,000 employees and a presence in over 100 countries. Cipla has strong R&D capabilities with over 1,300 scientists and 6 R&D facilities. It has a diverse portfolio of over 2,000 products across 65 categories. Cipla focuses on expanding globally through strategic investments and partnerships while facing competition in India from major players like Sun Pharma and Lupin.

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darshan jain
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Cipla Ltd.

General Overview –
Cipla Ltd. is an Indian multinational pharmaceutical company that uses latest technology to produce
high quality medicines and care accessible to all. It was incorporated in the year 1935 and is
headquartered in Mumbai. The company offers drugs used for the treatment of cancer, Alzheimer`s,
arthritis, Parkinsons, cardiovascular diesases, respiratory diseases, provide consulting services on
preparation of products and materials, conducts plant evaluation and supplies plant equipments. To
make healthcare more affordable globally, they are deepening their presence in the key markets
of India, South Africa, the United States among other economies of the emerging world.

Cipla Ltd. is listed on BSE Ltd. (BSE: 500087) and NSE of India Ltd. (NSE: CIPLA) with a market
capitalization of 49563.56 crores. The face value of the share is 2 rupees and has a P/E of 28.33.
Cipla is trading at 586.4 at the time of drafting this report (11 th May, 12:28 IST) with a 52 week high
of 632.65. Recently, Cipla has a bullish sentiment and has announced a 25 crore fund to support the
government’s efforts to combat the covid-19 pandemic and it could become one of the first
domestic companies to roll out drugs for coronavirus.

Management of the Company –


Dr. Y. K. Hamied is the chairman of the company, and represents the second generation of Cipla’s
founding family. He is an Elected Honorary Fellow of the Royal Society, UK, for distinguished service
to science. He also has a Lifetime Outstanding Achievement Award at IMA International
Management Conclave and an ET Family Business Lifetime Achievement Award. After a successful
run of 78 years, Cipla restructured its management by appointing a professional CEO and non-family
managers in senior positions in the year 2013. The board of directors include

Name Designation Date of Joining Qualifications


Dr Y. K. Hamied Non-Executive 21 July, 1972 PHd Organic
Chairman Chemistry
Mr M. K. Hamied Non-Executive Vice 16th August, 1977 Science Graduate
Chairman
Ms Samina Vaziralli Executive Vice 10 July, 2015 Msc. International
Chairperson Accounting and
Finance
Mr S. Radhakrishnan Non-Executive Director 12 November ,2010 Chartered
Accountant
Mr Ashok Sinha Independent Director 16 July, 2013 Btech. in Electrical
Engineering and
PGDM
Dr Peter Mugyenyl Independent Director 12 February 2014 Bachelor of
Medicine and
Surgery
Mr Adil Zainulbhai Independent Director 23 July 2014 Btech and MBA
Ms Punita Lal Independent Director 13 November, 2014 BA(hons.) Eco and
MBA
Ms Naina Lal Kidwai Independent Director 06 November, 2015 MBA
Cipla Ltd.

The new Diverse & Inclusive Management Council of 9 is represented by 3 women.

Name Designation Date of Joining Qualifications


Umang Vohra MD and Global CEO October, 2015 Btech, MBA Finance and
Marketing
Kedar Upadhye Global CFO August, 2016 Cost Accountant and Company
Secretary
Geena Malhotra President Chief Technology 1986 Bacherlors in Pharmacy and
Officer, Manufacturing Executive MBA
Operations & Repiratory CoE
Dr. Ranjana President, Medical Affairs 2013 PHd Health
Pathak and Pharmacovigilance & Administration,MBA, PGD in
Global Head - Quality Pharmaceutical and Chemical
Analysis, Bsc. (Hons) in
Chemistry
Dr. Raju Mistry President and Global Chief April, 2019 PHd. Organisational Behaviour,
Officer M.A. Industrial Psychology, B.A.
Pschology
Nikhil Chopra Executive Vice President & 1996 Degree holder of Organic
CEO – Indian Business Chemistry
Pradeep Bhaduria President and Chief Scientific 2020 Masters in Pharmacy
Officer
Swapn Malpani Executive Vice President, 2016 Btech , PG in Supply Chain
Global Head- Supply Chain Management
and Procurement
Paul Miller CEO – Cipla South Africa 2013 MBA

Cipla has been certified a Great Place to WorkTM for the year 2019-20. The company has always
placed a premium on talent. With an employee base of over 26000, Cipla has a turnover of USD 2.3
Bn.
Cipla Ltd.

SWOT Analysis –
Strengths
1. Strong R&D: Cipla has focused on developing new products as well as on improving drug
delivery systems and expanding product applications. Cipla has set up strong Research
and Development department for the same. It has over 1300 scientists and 6 R&D
facilities.The strong R&D facilities are well supported by many manufacturing plants across
the cities.
2. Reverse Engineering: Cipla's business model based on reverse engineering is posing severe
disruption. This helps Cipla offer cheap and affordable medicines to its consumrs.
3. The wide range of Products: Cipla has a broad product portfolio includes APIs and
formulations for humans and animal healthcare products. Cipla has over 2000 products in
over 65 categories and is constantly looking for expansion of its product portfolio.
4. Advanced Technological and Social initiatives: Cipla supports cancer patients by providing
them low cost medicines and it initiated the “NO touch Breast Scan”which is a step forward
to screening technology in India.
5. Good Recognition by Regulatory Authorities: Cipla’s products are well recognized by
regulatory authorities of India, USA, Gerany and the UK etc. which provides credibility to the
products of Cipla.
6. Strong Employee Force – Cipla has an emplyee base of over 26000 and has been nominated
as a Great Place to Work for the year 2019-2020.

Weaknesses
1. Lack of significant presence in developed countries: India is Cipla’s major market for
revenue generation. Although Cipla has presence in over 100 countries, it has low significace
in other developed markets and thus is highly dependent on the Indian market.
2. Negative Campaigning: AIDS healthcare foundation had challanged Cipla over pricing of its
drug for AIDS, which keep the drugs out of reach for numerous people in need. This brought
negative publicity for Cipla.

Opportunities
1. Strategic Expansion: In the recent past Cipla has been expanding its busniess through
initiatives such as investments, partnerships and acquisitions in India as well as in the
International market. For instance Cipla invested in a biotechnology manufacturing
facility in South Africa. It can increase investments in the budding markets to push
expansion in the global economy.
2. Treatment of HIV: Cipla offers a wide range of ARV products for treatment pf HIV in
both children and adults. Th growing number of patients can be provided cure by cipla’s
medicines.
3. Venture in Alziermer’s Medication: It can venture into Alzeimer’s disease medication.

Threats
1. Drug Pricing control methods in India: Governments have influence over pricing of a drug
through national health organisations. In India, a new pricing policy under Drug price control
has been proposed which can have a negative impact on Cipla. Changes in pricing policy
affect the pharmaceutical companies.
Cipla Ltd.

2. Intense competition in generics industry: There is intense competition in the Indian generics


industry from major competitors such as Lupin, Sun Pharma etc as well as from
Multinational pharmaceutical companies.  This affects growth potential as well as limits the
market share for Cipla
3. Fluctuation in Exchange rates: Any changes in the exchange rates affect the company’s
financial agreement with other countries and thus can affect profitability.

Competitive Analysis-
1. Sun Pharma: It is the largest pharmaceutical company by market share (110741.31 crores)
and it manufactures and sells pharmaceutical formulations and active pharmaceutical
ingredients primarily in India and the United States. These are the two key markets for Cipla
and hence it faces instense competition from sun pharma and deters its growth in market
share. Sun Pharma has 5,281 more employees vs. Cipla.
2. Lupin: Lupin is perceived as one of Cipla's biggest rivals. Lupin was founded in 1968, and is
headquartered in Mumbai, Maharashtra. Like Cipla, Lupin also operates in the
Pharmaceuticals sector and specializes in APIs and formulations. Lupin generates $110.6M
more revenue vs. Cipla.
3. Dr. Reddys: Like Cipla, Dr. Reddy’s motto is to provide Generic Formulations by offering
more than 200 high-quality generic versions of expensive innovator medicines—at a fraction
of the cost—in over 80 countries around the world due to an efficient value chain. It has a
higher market share than cipla but cipla has a higher net sales and profit as compared to Dr.
Reddys.

Conclusion and way forward –


1. More than 50% of Cipla’s total revenue comes from India (38%) and North America
(21%). It should diversify its presence by tapping the opportunities in the emerging
markets where there is a high demand of medicines.
2. It is time that Cipla strengthens innovation in APIs as it faces intense competition from
many players in the industry, which is hindering Cipla’s increase in market share.
3. Overall, the company has a strong position with their Generics business in India
contributing 19% of the domestic pharmaceutical revenues with 4,000+ partners
covering the entire country. The company also has strong financials and low debt, and
Cipla seems to be a promising company with strong fundamentals.
Cipla Ltd.

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