Dr Reddy's Finance Case

Dr Reddy's

The Director's Report talks about the acquisition of companies in the generic space in Europe and USA in line with Reddy's expansion plans. . The increase in sales by 38% has been attributed to the launch of a generic drug in North America as well as the growth of PSAI business segment in emerging markets like South Korea. In relative terms, this led to a slide in India's contribution to Dr. Reddy's revenues-from 21% in FY 2007-08 to 17% in FY 2008-09.In the MDA, the Company has also recorded the impairment losses in goodwill and intangibles of due to Betapharm. This resulted in a net loss for the financial year as well as a decrease in stockholder's equity. This is one of the reasons why we see an increase in the D/E ratio for FY 2008-09 despite a decrease in the debt when compared to FY 2007-08.

Cipla

The Director's report highlights the growth in sales by over 20% due to the introduction of new drugs in the HIV space. But the net profit does not show a corresponding growth since it incurred a loss on its foreign exchange business due to adverse currency fluctuations. To meet the increasing demands of domestic and international business, the company has invested 1900 crore in fixed assets. Cipla has also outlined its concerns regarding the patent system as well as talked about its prospective areas for growth.

Dr Reddy's

The Director's Report talks about the acquisition of companies in the generic space in Europe and USA in line with Reddy's expansion plans. The company has also recorded the impairment losses in goodwill and intangibles of due to Betapharm. This resulted in a net loss for the financial year as well as a decrease in stockholder's equity. The long term loans that were taken for Betapharm acquisition were paid off during this period resulting in a decrease of 856 million in outstanding loans. As observed throughout the years, the Research and Development expenses is on an upward trend and increased by 19% when compared to the previous year.

Cipla

The Director's report takes note of the various challenges posed due to the recessionary situation and shows skepticism about the effectiveness of the government measures. The company's turnover increased by 22% to over 5000 crore.To meet the increasing demands of domestic and international business, the company has invested 1900 crore in fixed assets. Cipla has also outlined its concerns regarding the patent system as well as talked about its prospective areas for growth. It also talks about its social responsibility initiative through the Palliative Care and Training Centre it runs.

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