A Sectoral Analysis of BSE-Listed Indian Pharma Companies

Abstract

Purpose: Investors, including domestic and international firms, venture capitalists, and financial institutions, rely on research to evaluate investment opportunities in the Indian pharmaceutical sector. Research helps assess factors such as market potential, company performance, R&D capabilities, regulatory environment, and risk-return profiles. Research plays a crucial role in guiding research and development (R&D) investments and priorities within the Indian pharmaceutical industry. By identifying unmet medical needs, emerging therapeutic areas, and technological advancements, research helps companies allocate resources effectively and focus on areas with the highest potential for impact and return on investment. The current research includes analysing financial statements, such as income statements and cash flow statements, to assess the profitability and earnings stability of pharmaceutical firms, and also investigate factors influencing EPS growth, such as revenue trends, cost structures, research and development (R&D) investments, regulatory environments, and market dynamics. Additionally, the study of DPS involves evaluating dividend payout ratios, dividend yield, dividend stability, and factors driving dividend decisions, including company profitability, cash flow generation, capital requirements, and shareholder preferences. Understanding the relationship between EPS and DPS in the Indian pharmaceutical sector provides valuable insights for investors, analysts, and policymakers in assessing the financial health, investment attractiveness, and shareholder value creation of pharmaceutical companies. Pharmaceutical companies listed on the Bombay Stock Exchange were selected for the study. Speculations were tested using ANOVA and T-TEST. The audit revealed that investors can invest in Dr. Reddys Laboratories, Abbott India, and Themis Medicare for their EPS to be maximum and Dr. Reddys Laboratories, Abbott India, and Novartis India for their DPS to be maximum.

Methodology: Fifteen BSE-listed pharmaceutical companies are considered for the present research work and analysed by using EPS and DPS.

Result: Selected Large, medium, and small Indian pharmaceutical companies listed on the BSE were the subjects of this study's analysis of their EPS and DPS. The websites of Money Control and the BSE provided the majority of the time series data used in the study on two different variables, EPS and DPS. Five years, from 2019 to 2020 to 2022–2023 are included in the analysis of the EPS and DPS. The BSE-listed Indian pharmaceutical businesses' EPS and DPS were examined in this study. Descriptive statistics (mean, standard error, standard deviation, skewness, and kurtosis) were computed for the determined EPS and DPS. An ANOVA test is run on the EPS and DPS data to find the differences between the chosen pharmaceutical businesses listed on the BSE. It is recommended that investors put their money into Abbott India, Themis Medicare, and Dr. Reddys Laboratories in order to maximise their EPS, and Novartis India, Abbott India, and Dr. Reddys Laboratories in order to maximise their DPS.

Originality/Value: The BSE-listed Indian pharmaceutical businesses' EPS and DPS were examined in this study. Descriptive statistics (mean, standard error, standard deviation, skewness, and kurtosis) were computed for the determined EPS and DPS. Based on the study, the right companies for the investors are recommended.

Paper Type: Exploratory research.