CIPLA LTD

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CIPLA LTD

• Analyst Report
• Group 3

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WHO IS CIPLA WHAT DO THEY DO?

• WHO
• The Chemical, Industrial Pharmaceutical
  Laboratories
• Founded by Khwaja Abdul Hamied in the year 1935
  and
• On August 17, 1935, Cipla was registered as a
  public limited company.
• WHAT
• - Today, Cipla is a leading player in
  anti-infective and anti-asthmatic formulations
• - Specializes in the manufacturing of
  steroids and hormones and
• - Cipla has time and again earned the
  distinction of coming out with
  pioneering and life saving drugs.

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HOLD

• Why we recommend so?

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KEY RATIOS
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A FEW MORE REASONS
Cipla vs. SP Nifty (1 Year)

• Cipla has followed the market trend for the last
  1 year and
• In December 2005, Cipla somewhere breached the
  market line crossing it to end at approx Rs. 600.
• Whats in it for the investor?
• HOLD on to your stock to benefit from its
  Capital Appreciation
• The Estimations showcase the company to be a
  healthy company with positive and healthy FCFF
• As of 9 December 2006 Cipla stands at Rs. 247.
  The price is Rs. 292.

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PEER COMPARISON

• Cipla has outperformed the Industry average
  consistently!

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A CHECK ON FUNDAMENTALS

• The company is trading at 33.7x 2006 earnings and
  26.9x 2007 earnings.
• At the present level of activities we maintain
  that the company is a Market Performer and
  recommend a HOLD on the stock..

• Strong product pipeline Filed 658 DMFs and 71
  ANDAs. The company has also secured 170 marketing
  authorizations in Europe, 4,000 product
  registrations globally and 7000 pending
  approvals and
• Exports API drives growth Exports grew by 37
  Accounts for 50 of total sales API exports grew
  by 120.

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• EBT would be increasing at the rate of 15 over
  the next five years CAPEX by Rs.2000 crores
  every year for the next 3 years then for the
  next 2 years it is expected to grow at Rs.1500
  crores.
• R D on the rise
• R D has enabled Cipla to register high
  realizations and maintain an edge above
  competition
• Low-risk business model
• Robust partnership model - has entered into
  global tie-ups with various generic players (like
  Watson, Mylan, Barr and Ivax) for supplying its
  generic products. This strategy enables Cipla to
  leverage local market knowledge of its partners
  and utilize its own RD, product development, and
  manufacturing skills
• GDR issue to fund acquisitions
• Recently, Cipla raised Rs7.6bn through a 170mn
  GDR issue of 11.05mn shares, priced at Rs 695 per
  share.

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SWOT ANALYSIS

• STRENGTHS
• Ranks 2 in the retail prescription market in
  India
• 18 brands that feature among the top-300 brands
• Large basket of 1,500 formulations and
• Partnered 8 leading generics companies in the US
  for nearly 125 projects.
• WEAKNESSES
• Impact of IPR regime.
• OPPORTUNITIES
• Biotherapeutics A new and promising area
• Agreement with Avesthagen and
• Venturing towards areas of cardiology and
  anti-cancer.
• THREATS
• Partnership related and
• Potential de-rating.

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STRATEGIC TIE-UPS

• Subsidiary in Dubai Cipla has set up a wholly
  owned subsidiary, Cipla FZE situated at Jebel Ai
  Free Zone in Dubai, United Arab Emirates. This
  is the part of strategy to explore the growing
  markets in middle east countries through exports.
• It has a research alliance with a Bangalore-based
  biotech company Avesthagen, to develop
  biotherapeutic products
• Cipla entered agreement with Pentech Pharma of
  USA for marketing a range of generic products for
  American market
• The first phase of the new formulation plant at
  Baddi, Himachal Pradesh, for the manufacture of
  tablets and capsules commenced commercial
  production in April 2005 and
• Presence in Africa and Europe.

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• THANK YOU