CIPLA INDUSTRIES GROUP: 17

Cipla Industries Cipla Limited is pharmaceutical company based in Mumbai, India. Founded by nationalist Indian scientist Khwaja Abdul Hamied as The Chemical, Industrial & Pharmaceutical Laboratories in 1935, Cipla makes drugs to treat cardiovascular disease, arthritis, diabetes, weight control, depression and many other health conditions. Cipla received the Thomson Reuters India Innovation Award in 2012.

Cipla is the world's largest manufacturer of antiretroviral drugs (ARVs) to fight HIV/AIDS, as measured by units produced and distributed (multinational brand-name drugs are much more expensive, so in money terms Cipla medicines are probably somewhere down the list). Roughly 40 percent of HIV/AIDS patients undergoing antiretroviral therapy worldwide take Cipla drugs. Indian law from 1972 until 2005 allowed no (end-product) patents on drugs, and provided for compulsory licensing, Cipla was able to manufacture medicines which

enjoyed patent monopoly in certain other countries (particularly those where large, multinational pharmaceutical companies are based). By doing so, as well as by making an executive decision not to make profits on AIDS medication, Cipla reduced the cost of providing antiretrovirals to AIDS patients from $12,000 and beyond (monopoly prices charged by international pharma conglomerates) down to under $100 per year. While this sum remains out of reach for many millions of people in Third World countries, government and charitable sources often are in a position to make up the difference for destitute patients. Cipla also pioneered a three-in-one tablet called Triomune containing a fixed-dose combination (FDC) of three ARVs (Lamivudine, stavudine and Nevirapine). Through its price offers to developing country governments and leading NGOs such as Doctors Without Borders (MSF) and Oxfam, along with its keen participation in PEPFAR, the Global Fund, the Clinton Foundation's HIV/AIDS Initiative and other major donor programs fighting HIV/AIDS in Africa and elsewhere in the resource-poor world, Cipla has played an unparalleled leadership role in ensuring access to antiretroviral treatment (ART) rose from under 10,000 on the entire African continent at the time of its $350 per patient per year offer in 2001, to over 8 million in the developing world by 2012.

In May 2012, Cipla made headlines worldwide by slashing prices on several cancer drugs previously priced far out of reach to the vast majority of the world's population

Fundamental Analysis: 1. Economic Analysis-India has traveled through a remarkable journey in the last two decades. Seen purely from the angle of growth, the performance has been very impressive. In the Ninth Plan the annual growth rate was 5.5 per cent. It rose to 7.5 per cent in the Tenth Plan and to an 8.2 per cent in the first four years of the Eleventh Plan. GDP growth has slowdown to 5.5 per cent in 2012-13. It takes into account the following two risks: (i) delayed rainfall affecting agricultural growth (ii) a contraction in the euro zone (Standard & Poor's forecasts the euro zone GDP growth to shrink by 0.8 per cent in 2012). Overall rainfall deficiency during the southwest monsoon 2012 although is only 8 per cent, due to its delayed nature kharif food grain output is likely to decline by 10 per cent (y-o-y). This will adversely impact overall agricultural production. Thus affecting Indian economy. Recently announced reforms such as the planned restructuring of state electricity boards, relaxation in the foreign direct investment limits for multi brand retail, aviation, broadcasting and power exchanges along with a hike in diesel prices are likely to improve investor sentiments Average wholesale price index (WPI) inflation is estimated to be at 8.0 per cent for 2012-13. This reflects - (i) high and sustained food inflation due to delayed monsoons that have adversely affected food output/supply and, (ii) hike in domestic fuel prices. The aspects of Indian economy which are to be taken care of are: a. The way out of industrial slump: Key messages 1. Industrial growth has come down sharply in recent times led by domestic factors 2. Slowdown is evident, quite deep-rooted and broadbased

3. Swift and speedy resolution of regulatory hurdles is the key to revive industrial growth The industrial sector, which accounts for around 27 per cent of overall GDP, plays a key role in India's growth story. Industrial growth has usually been similar/closer to the GDP growth rate in terms of the long-term trend. However, after clocking a growth of 3.4 per in 2011-12, industrial growth is expected to be around 3.6 per cent during 2012-13, much lower than the overall GDP. At this rate, the industrial growth is much lower than the rates achieved in the recent past and also well below the potential growth rate. The revival of the industrial sector is necessary not only for raising the GDP growth but also for creating large-scale employment in the country. Currently, a large number of Indians are still trapped in agriculture, being either unemployed or as disguised/under employed. The industrial sector has the potential to generate large-scale employment opportunities to absorb this additional work force. The three questions that arise in this context are (i) why has industrial growth declined (ii) which are the major sectors that have witnessed a slowdown and what are the issues affecting these sectors and (iii) how can these issues be tackled to revive industrial growth. This month's theme is a modest attempt to answer these questions. Industrial Performance The current weak global and domestic environment has adversely impacted industrial growth in India. With the share of goods and services exports in GDP increasing from 15 per cent in 2002-03 to 22 per cent in 2010-11, India is far more vulnerable to global developments today than it was a decade ago. But, the extent of slump witnessed in industrial growth lately cannot be attributed to global factors alone as the industrial output growth has fallen even below the level witnessed during the 2008 global crisis.

2. Industrial Production: Industrial output growth turned positive in August after two consecutive months of contraction. IIP registered a growth of 2.7 per cent in August 2012, after contracting by 0.2 percent and 1.8 per cent, respectively, in the previous 2 months. At a broad classification level, manufacturing, mining and electricity, all were in the positive territory. Manufacturing sector output registered a growth of 2.9 per cent in August 2012.The sector had contracted by 0.4 and 3.1 per cent during the past 2 months. At 2-digit classification, 13 out of the 22 manufacturing industry groups showed positive growth. The industry group 'Publishing, printing and reproduction of recorded media' showed the highest growth of 15.4 per cent, followed by 14.5 per cent growth in 'Radio, TV and communication equipment and

apparatus'. The industry group 'Office, accounting and computing machinery' contracted by 13.1 per cent, followed by a9.5 per cent fall in 'Motor vehicles, trailers and semitrailers'. Electricity output growth has also started faltering. It fell from 8.8 per cent in June 2012 to 2.8 per cent in July and further down to 1.9 per cent in August. Electricity production has been hit by inadequate coal supply. Mining and quarrying output grew by 2.0 per cent over a low base of 5.5 per cent in August 2011. Consumer goods drove growth in the manufacturing sector. The 5.0 per cent growth in the consumer sector was aided by a growth in both consumer durables and well as consumer non-durables. Consumer durables' output grew at 4.0 per cent in August 2012 as opposed to 0.6per cent growth in the previous month. Consumer nondurables' output grew at 5.8 per cent in August 2012.On a monthly basis, production of scooters and mopeds fell by 8.1 per cent in August as compared to a growth of 4.6 per cent in the previous month. Production of telephone instruments declined by 1.2per cent month on month (m-o-m), while that of colour television sets grew by 6.1 per cent (m-o-m) in August. Production of sugar grew by 25 per cent (m-o-m) in August, after plummeting by 64.9 per cent (m-o-m) in the previous month, while that of maid a fell by 11 percent (m-o-m) in August as compared to a growth of 15.9per cent (m-o-m) in the previous month. Output of the eight core infra industries that contribute37.9 per cent to the IIP, grew by 2.1 per cent in August as against a growth of 4.8 per cent a year ago. Natural gas output contracted by 13.5 per cent, same as in the previous month, due to lower-than-expected production in the D6 block of Reliance Industries in the KG basin. Credit growth to the infrastructure sector has remained at low levels. Sustained weakness in external demand continues to impact India's industrial output adversely. Merchandise exports registered a contraction of 10.7 per cent in September 2012. For the first time since July 2009, sales of commercial vehicles, which have the largest weights in capital goods, contracted by 2.1per cent in September. Sluggish industrial activity and poor freight availability have hit sales of commercial vehicles.

3. External Factors: At $18.1 billion, India's trade deficit for September2012 was the highest in the past 16 months as imports increased significantly while exports remained tepid .The trade deficit for the first 6 months of 2012-13 stood at $90.3 billion versus the deficit of $89.4 billion during April-September 2011.In September 2012, India's exports grew by 6.13 percent vis--vis

a contraction of 0.5 per cent last month. At $23.6 billion, exports in September 2012 were higher than the exports recorded in August this year (valued at $22.3billion) but lower than the September 2011 exports valued at $26.6 billion. Over April-September2012, exports dipped by8.1 per cent to $141.6 billion from $154.2 billion during the same period last year, led by a contraction in global Demand and deceleration in manufacturing. For the first time since June, imports rose on a monthly basis, registering a growth of 10 per cent during September. In absolute terms, imports stood at $41.8billion, an increase of 5.1 per cent over the imports in September 2011. India's rising import bill has been driven by its heavy dependence on crude oil imports. The cumulative value of imports for April-September2012 was $ 231.9 billion as against $243.5 billion during the same period last year, registering a negative growth of 4.8 per cent. Despite crude oil prices remaining stagnant at around$113 for the last 3 months, the import bill has been rising because of rising volume demand for imports. In September, oil imports surged by 30.7 per cent to $14.1 billion as compared to the corresponding month last year, while non-oil imports fell by 4.5 per cent to$27.7billion.For April-September 2012, oil imports were valued at$78.6 billion, 3.9 per cent higher than the oil imports of$75.6 billion in the corresponding period last year. Apart from oil, gold accounted for a major portion of imports, growing by 8.6 per cent during the period. For April-September 2012, non-oil imports were value data $153.3 billion, 8.7 per cent lower than the non-oil imports valued at $167.9 billion in April-September 2011.

4. Inflation: WPI-based inflation rose to a 10-month high of 7.8 percent in September 2012 from 7.6 per cent in the previous month. The pick-up in headline inflation was driven by an upward revision of diesel prices and elevated levels of non-food manufacturing inflation. A significant increase in the prices of non-administered fuels on account of high global crude oil prices, created a further upward pressure on inflation. Excluding the fuel group, inflation was much lower at 7.0 percent in September. Core inflation as measured by non-food manufacturing inflation or CRISIL Core Inflation Indicator (CCII) remained high in September due to cost-push pressures from (i) rupee depreciation and (ii) revision in prices of administered fuels. The only respite came from food inflation which fell to 7.9per cent in September from double-digit levels earlier this year. However, the moderation in food inflation is likely to be

temporary as kharif food-grain production is expected to be 10 per cent lower than last year due to delayed monsoons. Going ahead, the upside to crude oil and commodity prices driven by increased global liquidity could present short-term risks to WPI inflation .However, if the rupee maintains its recent strengthening bias, it could take some pressure off the reported inflation. Seasonally adjusted, 3-month moving average of WPI inflation stood at 7.6 per cent in September, unchanged from the previous month. The new combined CPI fell to 9.73 per cent in September from10.03 per cent in the previous month. Food inflation in the new CPI declined marginally to 11.6 per cent in September from 12 per cent in the previous month. Inflation in primary articles slipped sharply to 8.8 percent in September compared with 10.1 per cent in August. The steep decline in primary food inflation to its lowest levels in the last 7 months was due to the moderation in inflation of fruits and vegetables to 0.1per cent in September. Over the next few months, however, primary food inflation is expected to escalate from its current moderate levels due to the adverse impact of delayed monsoons on food grain production. Non-food primary inflation also declined to 10 per cent in September from 13.8 per cent in the previous month, primarily due to a fall in fiber prices. However, oil seeds inflation, which has risen from around 17 per cent in April to over 28 per cent in September, presents a major upside risk to primary non-food inflation in the coming months. Fuel inflation rose sharply to 11.9 per cent in September 2012 from 8.3 per cent in August. Increase in electricity tariffs effective from June 2012 and the partial impact of an increase in diesel prices in September raised inflation of administered fuels to10.0 per cent in September from 7.0 per cent a month ago. The administered fuel group inflation could see a further rise in October as the full impact of the diesel price revision plays out. In September 2012, the price of the Indian basket of crude oil remained almost unchanged from levels seen a year ago, while the rupee depreciated by 14.5 per cent on a y-o-y basis, taking the inflation of internationally-linked fuels to 17.3per cent from 12.2 per cent in the previous month .Manufactured products inflation rose to 6.3 per cent in September 2012 from 6.1 per cent in August due to a pick-up in inflation of basic metals, chemicals and manufactured food. Prices of manufactured food products accelerated to 9.8 per cent from 9.0 per cent last month. CCII rose to 6.2 per cent in September 2012 from 5.9 per cent in the previous month. The RBI's

existing measure of core inflation - non-food manufacturing inflation also remained sticky at 5.6 percent in September. Basic metals and chemicals together contributed over 60 per cent to overall core inflation in September, reflecting a pass-through of higher imported input costs driven by 14.5 per cent depreciation in the rupee on y-o-y basis. In contrast, CPI core inflation (which largely comprises of services wherein the cost of production is unaffected by currency movements) has fallen continuously from the double-digit levels at the beginning of the fiscal year to 8.0 per cent in September.

5. Money and Banking: In its second-quarter monetary policy review on October 30, 2012, the RBI kept the repo rate unchanged at 8.0 per cent under the liquidity adjustment facility (LAF). Consequently, the reverse repo and the marginal standing facility (MSF) rate remained unchanged at 7.0 and 9.0 per cent, respectively. However, based on its assessment of liquidity conditions, the central bank slashed the Cash Reserve Ratio (CRR) by 25 bps from 4.5 percent to 4.25 per cent. The move is expected to inject 175 billion of primary liquidity into the bankingsystem.The RBI stated that it had front loaded the 50bps reduction in the repo rate in April 2012, but persistent high inflation has constrained its ability to cut rates further. The 25 bps reduction in the CRR was guided by the fact that systemic liquidity deficit in the banking system has remained high and would have adverse implications for credit flow to productive sectors and the overall growth of the economy, going forward. The RBI anticipates a rise in inflation over the next few months. Hence, the policy rates have been maintained at their current levels. Although growth has come down, inflation still remains at elevated levels and is beyond the RBI's comfort zone. Growth in bank credit remained unchanged at 16.0per cent for the fortnight ending October 19, 2012. A year ago, growth in bank credit stood at 19.4 per cent. Non-food credit growth also increased marginally to15.7 per cent for the fortnight ending October 19,2012, as compared to 15.5 per cent for the fortnight ending October 5, 2012.At the sect oral level, credit to agriculture increased by21.3 per cent in September 2012, up from 7.9 per cent year ago. Growth in credit to agriculture has been increasing since December 2011. Credit growth to industry dropped to 15.6 per cent in September 2012as compared with 22.9 per cent a year ago. Deceleration in credit growth to industry was observed in all the major sub-sectors, barring chemical & chemical

products, cement & cement products and paper & paper products. Credit toNBFCs increased by 31.8 per cent in September as compared to 46.2 per cent in the same month last year. Credit to the consumer durables sector has been contracting since December 2011. It contracted by nearly 17 per cent in August 2012. As reflected in the IIP numbers, output growth of consumer durables has remained weak for several weeks now. Slowing growth and poor demand conditions have taken a toll on the sector. Deposits grew by 13.7 per cent for the fortnight ending October 19, 2012. This is marginally lower than the 14.0 per cent growth recorded for the fortnight ending October 5, 2012. The credit-to-deposit ratio stood at75.4 per cent for the fortnight ending October 19,2012, as against 73.9 per cent a year ago. The incremental credit-to-deposit ratio stood at 42.1 percent for the same fortnight as against 51.1 per cent a year ago.

Global Economy: IIMF lowers global growth projections Growth prospects in both advanced and emerging economies continues to remain fraught with downside risks. A worsening sovereign debt crisis in the euro zone and the possibility of sudden sharp fiscal consolidation in the US in 2013 is weighing on business confidence and causing world trade to decelerate. Central banks continue to maintain very low policy rates and are implementing monetary easing programs to boost investment growth. Low growth and uncertainty in advanced economies is dragging down growth in emerging economies through trade and financial channels. However, greater global liquidity due to monetary easing in advanced economies is creating upward pressure on global commodity and crude oil prices thereby increasing upside risks to inflation in emerging economies. In October, the IMF lowered its 2012 growth projections for advanced , emerging, and developing economies to 1.3 per cent and 5.3 per cent from 1.4 per cent and 5.6 per cent, respectively. Sharp rise in government defence spending lifts US growth in the third quarter: According to the advance estimate released by the US Bureau of Economic Analysis, the country's GDP grew by 2.0 per cent in the third quarter of 2012, as compared to a 1.3 per cent rise in the second quarter. The pick-up in GDP growth was aided by a revival in real personal consumption (PCE) expenditure, a stronger housing

market and an increase in government defence spending. PCE, which accounts for nearly 70 per cent of economic activity, grew by 2 per cent in the third quarter compared with 1.5 per cent in the second quarter. The housing market showed signs of recovery as real residential fixed investment s growth accelerated to 14.4 per cent from 8.5 per cent in the previous quarter. Furthermore, real federal government consumption expenditure and fixed investment increased by 9.6 per cent in the third quarter from -0.2 per cent in the second quarter, driven by a 13 per cent increase in government defense spending. Non-residential fixed investments decreased by 1.3 per cent in the third quarter in contrast to an increase of 3.6 per cent in the second quarter as businesses cut down on investments over concerns about a worsening debt crisis in Europe, slowing demand from China and the impending fiscal cliff in the US. Unless an alternate solution for reducing a ballooning federal debt in the US emerges in the next few months, automatic budget cuts are set to take place from 2013 along with the expiry of tax cuts extended by the Bush administration. Anticipation of these fiscal tightening measures (referred to as the fiscal cliff) is dampening investments and adversely impacting growth in the current fiscal. UK emerges from recession: According to the Office of National Statistics, the UK economy grew by 4 per cent (q-o-q annualized) in the third quarter of 2012 after contracting for three consecutive quarters. The stronger-than-expected recovery was aided by a temporary pickup in business, transport and hotels services due to the London Olympics. The country's services industry, which accounts for 75 per cent of GDP, grew by 1.3 per cent (q-o-q) in the third quarter, rebounding sharply from -0.1 per cent in the previous quarter. Output in production industries increased by 1.1 per cent (q-o-q) in the third quarter, following a decrease of 0.7 per cent in each of the previous two quarters. The rebound in growth of production industries was led by a 1.0 per cent increase in the manufacturing sector and 4.1 per cent growth in water supply and sewerage. Recession deepens in the euro zone: Output in production industries increased by 1.1 per cent (q-o-q) in the third quarter, following a decrease of 0.7 per cent in each of the previous two quarters. The rebound in growth of production industries was led by a 1.0 per cent increase in the manufacturing sector and 4.1 per cent growth in water supply and sewerage.

According to the second estimate released by Euro stat, GDP growth in the euro zone stood at 0.2 per cent (q-oq annualized) in the second quarter of 2012, after having been flat in the previous quarter. In Germany, GDPgrowth slowed to 1.0 per cent y-o-y in the second quarter from 1.2 per cent in the previous quarter, while in Greece and Portugal, GDP growth contracted by a staggering 6.2 per cent and 3.3 per cent, respectively. Spain's GDP growth decelerated further to -1.3 per cent in the second quarter from -0.6 per cent in the first quarter. A slowdown in most economies within the euro zone has led S&P to revise its 2012 growth forecast for the region to -0.8 per cent from an earlier estimate of -0.7 per cent. Among Asian economies, China's GDP declined for the seventh consecutive quarter to 7.4 percent in the third quarter of 2012. Growth in investment, retail sales and industrial production were all higher than expected, suggesting that the worst may be over. The Chinese central bank has lowered policy rates twice and cut banks' reserve requirement ratio three times this year, in a bid to boost lending and buoy the slowing economy which has been dragged down by weak domestic demand and a decline in exports, especially to the US and Europe. While easing of monetary policy is estimated to have released 1.2 trillion Yuan for lending, the government has been simultaneously fast-tracking infrastructure projects to boost investment. Japans GDP grew by 3.3 per cent in the second quarter of 2012, up from 2.8 per cent in the first quarter. An increase in reconstruction activities post the earthquake in 2011, has driven economic growth in Japan. Inflationary risks likely to stay muted in UK, euro zone and China: Inflation in the UK moderated to 2.2 per cent in September, from 2.5 per cent in August. This is the lowest rate of inflation in the UK since November 2009. Almost all of the downward pressure was driven by the housing and household services sector where electricity and gas prices were last revised in September 2011, thereby creating a positive base effect in September 2012. This was partially offset by the transport sector, where rising prices of motor fuels fuelled inflation. Among Asian economies, inflation in China fell marginally to 1.9 per cent in September 2012, from 2.0 per cent in the previous month. Deflation in Japan moderated to -0.3 per cent in September from -0.5 per cent in August 2012. Japan may continue to experience a mild deflation this year as worries about Europe's debt crisis are likely to suppress growth in wages and economic activity. Policy rates All central banks kept rates unchanged in September

2012. Policy rates The Bank of England kept its bank rate unchanged at 0.5per cent. Policy rates in China remained at 6.0 per cent in September. Japan and the US maintained their policy rates close to zero.

Commodity price movements Commodity price movements Crude oil prices moderated slightly to $112.7 per barrel in October 2012 from $113.3 per barrel in September. After falling to a monthly average of $95/barrel in June 2012, crude oil prices have risen by 18.5 per cent, driven by geopolitical tensions and increased global liquidity. As per the latest data, soya oil prices fell by 1.7 per cent y-o-y in September, while rising by 2.5 per cent m-o-m. In October, wheat prices rose by 23.5 per cent on a y-o-y basis and by 0.2 per cent m-o-m. Aluminum prices fell by 8.1 per cent in October on a y-o-y basis while steel fell by 20.6 per cent on an annual basis.

2. Sector Analysis
The Pharmaceutical industry in India The Pharmaceutical industry in India is the world's third-largest in terms of volume and stands 14th in terms of value. According to Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, the total turnover of India's pharmaceuticals industry between 2008 and September 2009 was US$21.04 billion. While the domestic market was worth US$12.26 billion. Sale of all types of medicines in the country reached around US$19.22 billion by 2012 and expected to grow by 19% in 2013 Exports of pharmaceuticals products- increased from US$6.23 billion in 2006-07 to US$8.7 billion in 2008-09 a combined annual growth rate of 21.25%. According to Price water house Coopers(PWC) in 2010, India joined among the league of top 10 global pharmaceuticals markets in terms of sales by 2020 with value reaching US$50 billion. India is now amongst the top 5 emerging pharmaceutical market. With the increase in sales of generic medicines, continued groth in chronic therapies and a greater penetration in rural market, the domestic pharmaceutical market is expected to register a double-digit growth of 13-14% in 2013. Moreover the increasing population of the higher- income group in india ll open a potential US $8 billion market for multinational companies selling costly drugs by 2015,

besides, the domestic pharma market is estimated to touch US$ 20 billion by 2015, making India a lucrative destination for clinical trials for global giants. Growth of Import- Export

Pharmaceutical industry in india are growing at a rate of $4.5 billion, registering further growth of 8-9% annually.

G o v e g Government initiative The union Finance Minister highlighted few points in union budget 2012-13:

Proposed to extent concessional basis custom duty of 5% full exemption from excise duty/CVD to six specified life-saving drugs / vaccines. Probiotic are a cost- effective means of combating bacterial infections. It is proposed to reduce the basic customs duty on this from 10%- 5 %.

Basic custom duty and excise duty reduced on Soya products to address protein deficiency among women and children. Future growth India ll see largest no. of merger and acquisitions in the pharmaceutical and healthcare sector,according to consulting firm Grant Thornton. Market expected to grow at a CAGR of 15.3% during 2011-12 to 2013-14. In addition, the pharmaceutical companies such as Cipla, Ranbaxy, Dr. reddys Lab and Lupin might soon be part os the gov.s ambitious Jan Aushadhi project.

3. Company Analysis:

Cipla is the world's largest manufacturer of antiretroviral drugs (ARVs) to fight HIV/AIDS, as measured by units produced and distributed (multinational brand-name drugs are much more expensive, so in money terms Cipla medicines are probably somewhere down the list). Roughly 40 percent of HIV/AIDS patients undergoing antiretroviral therapy worldwide take Cipla drugs. Indian law from 1972 until 2005 allowed no (end-product) patents on drugs, and provided for compulsory licensing, Cipla was able to manufacture medicines which enjoyed patent monopoly in certain other countries (particularly those where large, multinational pharmaceutical companies are based). By doing so, as well as by making an executive decision not to make profits on AIDS medication, Cipla reduced the cost of providing antiretrovirals to AIDS patients from $12,000 and beyond (monopoly prices charged by international pharma conglomerates) down to under $100 per year. While this sum remains out of reach for many millions of people in Third World countries, government and charitable sources often are in a position to make up the difference for destitute patients. Cipla also pioneered a three-in-one tablet called Triomune containing a fixed-dose combination (FDC) of three ARVs (Lamivudine, stavudine and Nevirapine). Through its price offers to developing country governments and leading NGOs such as Doctors Without Borders (MSF) and Oxfam, along with its keen participation in PEPFAR, the Global Fund, the Clinton Foundation's HIV/AIDS Initiative and other major donor programs fighting HIV/AIDS in Africa and elsewhere in the resource-poor world, Cipla has played an unparalleled leadership role in ensuring access to antiretroviral treatment (ART) rose from under 10,000 on the entire African continent at the time of its $350 per patient per year offer in 2001, to over 8 million in the developing world by 2012.

In May 2012, Cipla made headlines worldwide by slashing prices on several cancer drugs previously priced far out of reach to the vast majority of the world's population Current News: 1.Cipla hopes to conclude Medpro acquisition by mid-August: Cipla is expanding its market in Africa. Thus with the acquition of medpro cipla will increase its folds to Africa. Thus, will focus on building a marketing and sales front-end in markets
that have a critical mass of the branded generics business. When Cipla Ltd informed the bourses on Wednesday that it was in discussions to acquire 51 per cent of South Africa's Cipla Medpro for about $220 million, there was a clear message. And that message was not just about growing inorganically in one of its important markets. Analysts saw it as a move by India's second-largest pharmaceuticals company by retail sales (after Abbott) to get to the front end of the African market. The deal, when concluded, will give it more access to the region and a direct, customer-facing presence in a key export market.

2.Drug maker cipla floating venture fund to incubate startups Ciplas initiative is one of the first such moves by an Indian pharma company though many large pharma MNCs have such investment arms. Indian pharma company Cipla Ltd is floating an in-house venture fund which will incubate firms involved in biotechnology, medical devices and chemical entities, and target startup hubs like Boston and London besides other markets, according to The Economic Times. Quoting the companys new global CEO, Subhanu Saxena, the report said the objective is to build companies that will complement the future of the company. "I strongly believe that you don't want to mix running today with building tomorrow; so this way, I have the organisation focus on the operating business and I have a team that is able to, with sensible risk, place bets for the future. And of the five or six bets I place, only two or three need to pay off," Saxena told the newspaper.

The company invested in growth of startups earlier also. In 2005, Cipla invested in life sciences and R&D (research and development) company Avesthagen Ltd and continues to be a shareholder which is now undertaking a major organisational restructuring. Saxena did not give details of the corpus allocated for the fund but said it would be funded through the cash generated by the public listed firm. The venture will be led by Chandru Chawla, who has been appointed as head of the new business ventures. Samina Vaziralli, daughter of Cipla's joint managing director MK Hamied, will also be involved with the new fund. Ciplas initiative is one of the first such moves by an Indian pharma company. However, internationally, most MNC pharma companies have investment arms such as Pfizer Venture Investments, Novartis Venture Funds and GSK Venture Fund. The development comes at a time when Cipla is taking bold initiatives to expand. In February this year, the company announced that it is looking at acquiring South Africas Cipla Medpro for Rs 2,850 crore. It has also entered the US market for the first time since it started operations 60 years ago.

3. Cipla floats in-house venture capital firm

Cipla, India's second-largest drug maker by sales, is preparing to become an incubator for start-ups that will shape the future of the company. Cipla Ventures, the new in-house division of the drug maker, will weigh the prospect of investing in companies from start-up hubs like Boston and London among other places, in areas such as biotechnology, medical devices and new chemical entity.

The brainchild of Cipla's new Global CEO Subhanu Saxena, the idea of this business is to build companies that will complement the future of the company.

"I strongly believe that you don't want to mix running today with building tomorrow, so this way, I have the organisation focus on the operating business and I have a team that is able to, with sensible risk, place bets for the future," Subhanu Saxena told ET. "And out of the five or six bets I place, only two or three need to pay off," he added.

The venture will be led by Chandru Chawla, who has been appointed head of the new business ventures, and helping him will be Samina Vaziralli, who is one of the senior members of the leadership team of Cipla, and the daughter of Cipla's joint managing director MK Hamied.

Saxena asserts that funding business won't be an issue; its own internal accruals can take care of the new business. "We can fund it through our cash generation; you fund it like a VC to the next master, the team comes with the business case and you decide how you want to move forward," he added.

Cipla's new initiative comes at a time when the company is making bold moves in expanding its international business. Recently, it acquired South Africa's Cipla Medpro for Rs 2,850 crore, the only big-ticket acquisition it made since its inception. Also, apart from setting up a new team in Europe, Cipla has entered the US market for the first time since 60 years of existence. Finance: Cipla Limited Regd. Office: Mumbai Central Mumbai 400 008 STATEMENT OF STANDALONE AUDITED RESULTS FOR THE QUARTER AND YEAR ENDED 31ST MARCH 2013 (` in crores) Particulars 31.03.2013 Audited 1. from operations a) Net 31.12.2012 Unaudited Quarter Ended 31.03.2012 Audited 2030.70 1814.05 Year Ended 31.03.2013 Audited 8015.37 31.03.2012 Audited 6807.68

Income 1906.21

Sales/Income from Operations

(Net of excise duty) b) Other 60.48 39.79 51.53 187.05 169.82

Operating Income Total from operations (net) 2. Expenses a) Cost of 700.42 740.03 589.44 2646.83 2300.85 income 1966.69 2070.49 1865.58 8202.42 6977.50

materials consumed b) Purchases 93.46 of trade c) Changes in (49.49) inventories of finished goods, work-inprogress and stock-in-trade d) Employee 255.07 258.60 182.02 969.28 728.21 (220.24) 44.87 (290.75) 11.24 stock-in277.77 138.17 706.89 555.55

benefits expense e) Depreciation and amortisation expense f) Other 557.78 521.44 512.30 2051.03 1799.79 78.25 78.00 70.46 303.03 282.07

expenses Total expenses 1635.49 1655.60 1537.26 6386.31 5677.71

3. (+)/Loss from

Profit 331.20 (-)

414.89

328.32

1816.11

1299.79

operations before other and income finance Other 58.45 229.13

costs (1-2) 4. Income 5. (+)/Loss before finance costs (3+4) 6. costs 7. (+)/Loss Profit 372.02 (-) 459.07 365.02 2011.86 1421.46 Finance 17.63 9.30 2.26 33.38 26.63 Profit 389.65 (-) 468.37 367.28 2045.24 1448.09 53.48 38.96 148.30

before tax (56) 8. expense 9. Net Profit 267.56 (+)/Loss (-) 338.78 291.74 1507.11 1123.96 Tax 104.46 120.29 73.28 504.75 297.50

after tax (7-8) 10. Paid-up 160.58 160.58 160.58 160.58 160.58

equity share capital (Face Value

`2 per share) 11. Reserve excluding 8699.97 7380.73

Revaluation Reserves as per balance sheet of previous

accounting year 12. Basic and *3.33 Diluted Earnings per share (`) *Not Annualised A. PARTICULARS OF SHAREHOLDING 1. Public shareholding - Number of 500983877 shares of shareholding 2. Promoters and Promoter Group Shareholding a) Pledged/Encumbered - Number of NIL shares Percentage NIL NIL NIL NIL NIL NIL NIL NIL NIL Percentage 62.40 62.58 63.11 62.40 63.11 502473341 506720722 500983877 506720722 *4.22 *3.63 18.77 14.00

of shares (as a % of the total shareholding of promoter

and promoter group) Percentage NIL NIL NIL NIL NIL

of shares (as a % of the total share capital of the company) b) Non-Encumbered - Number of 295485978 295485978 295485978 295485978 295485978

shares Percentage 100.00 100.00 100.00 100.00 100.00

of shares (as a % of the total shareholding of promoter

and promoter group)

4. Technical Analysis:

Fibonacci Analysis

Numbers

and

Fibonacci Numbers (In case of Stock Breakout) 454.12 465.94 475.5 489 483.6 485.63 484.82 485.14 485.06 498.67

516 647.06 778.12 Fibonacci Numbers (In case of Stock Breakdown) 334.88 323.06 313.5 300 305.4 303.38 304.19 303.86 303.94 290.33 273 141.94 10.88 Fibonacci (Key Support levels) 373.12 384.94 394.5 408 402.6 404.63 403.82 404.14 404.06 417.67 435 566.06 697.12 Numbers Resistance

Intraday Resistance

Support

and

Intraday (for Jun 22 2013) R2 R1 S1 S2

Resistance/Support

Price 387.1 384.2 376.5 371.7

Moving Averages
Simple Moving Price Averages 10 Day Simple Moving 379.44 Average 20 Day Simple Moving 380.73 Average 50 Day Simple Moving 396.01 Average 200 Day Simple Moving 390.92 Average Exponential Moving Averages 10 Day Exponential Moving Average 20 Day Exponential Moving Average 50 Day Exponential Moving Average 200 Day Exponential Moving Average Price 380.11 383.56 389.9 383.23

Alerts

Unusual Stock Trading Volume Alert : Previous Stock Trading Volume was greater than 2 week, 1 month, 3 Months, 6 Months (Stock Trading Volume)Moving Average 52 Week Pattern 52 Week High @ 435.00, Stock is trading 14.08% 52 Week Low @ 305.00, Stock is trading 25.02% above 52 week Low Stock Stock Stock Stock Stock Gained in Gained in Gained in Lost in a Month a a a Day Week Year below 52 week High

Pattern 0.58% 0.90% 23.00%

8.28%

Final call:
Buy if the Stock price goes below Rs.373.40, if you are an Aggressive Investor. Otherwise a good
entry point for medium to long term Investment would be Rs.354.00. One can Sell if the Stock price reaches Rs.385.45, if you are an Aggressive Investor. Otherwise a good upside target for medium to long term Investment would be Rs.397.55.