Perspectives on Business Management, Economics & Information Technology (PBMEIT) Now also covers research on Psychology

PBME Volume I ISBN: 978-81-946245-3-0

FINANCIAL ANALYSIS OF ACQUIRING COMPANIES - INDIAN PHARMACEUTICAL INDUSTRY

Author(s): MS. ISHRAT RASOOL & DR. P.S. RAYCHAUDHURI & DR. POONAM SINGH

Abstract

Over the last few years, Indian pharmaceutical companies have been increasingly targeted by multinationals for both joint venture agreements as well as for acquisition. Mergers and Acquisitions in the pharmaceutical sectors have grown considerably in the past few years. The researcher attempted to analyze the financial performance of Acquirers of Indian Pharmaceutical Industry. For the present study, relevant financial ratios are identified (Profitability and liquidity ratios ROCE, RONW, ROTA, NPM, DER, and CR respectively and efficiency ratios like DTR, CTR and STR) and categorized into three broad groups. The sample for the study consists of 24 Indian Pharmaceutical Companies selection was done based on data availability according to the set performance standards. Further, five-year data pre-M&A and post M&A for every company has been carried out. The hypotheses are tested using the Paired Sample t-test. The research finds that there was no significant difference in pre- and post-M&A periods. Further, the study also investigates the question of why there is an insignificant difference using DuPont Analysis.

Keywords: financial analysis, ratio analysis, mergers, acquisitions, pharmaceutical industry

JEL Classification: M40, M41, M49

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