“A Comparative Analysis on Economic Efficiency of Indian Pharmaceutical Business Market” |

ABSTRACT:

With the de-licensing of pharmaceutical industry andcomplemented by scientific talent and research capabilities and IntellectualProperty Protection Regime, Indian pharmaceutical industry in all set to takeon new challenges in the international market. Indian pharmaceutical industryhas played a key role in promoting and sustaining development in the vitalfield of medicines. Financial analysts often assess firm's production andproductivity performance, profitability performance, liquidity performance,working capital performance, fixed assets performance, fund flow performanceand social performance. The financial performance analysis identifies thefinancial strengths and weaknesses of the firm by properly establishingrelationships between the items of the balance sheet and profit and lossaccount. Thus, the present paper is of crucial importance to measure the firm’sliquidity, profitability, and other indicators that the business is conductedin a rational and normal way; ensuring enough returns to the shareholders tomaintain at least its market value. In this context researcher has undertakenan analysis of financial performance of pharmaceutical companies to understandhow management of finance plays a crucial role in the growth. The present studycovers two public sector drug & pharmaceutical enterprises listed on BSE.The study has been undertaken for the period of twelve years from 199899 to200910. In order to analyze financial performance in terms of liquidity,solvency, profitability and financial efficiency, various accounting ratioshave been used. Statistical measures i.e., linear multiple regression analysisand test of hypothesis – t test has been used. The worker involvement in decision making would augmentthe mental satisfaction for workforces and monetary performance of thecorporate sector. The research paper would like to measure the post-financialperformance of pharmaceutical corporate sector considering sample size n = 10of top pharma units adopted ESOP during 1st April, 2000 to 31st December, 2005using financial performance measures for six years after following the employeestock option plan. The study found that the post- financial performance ofSuven Life Science Ltd. has reduced as compared to the industry average.However the financial performance of Ranbaxy Ltd. had statistically improved ascompared to the group average value for all financial measures underconsideration by the study.