Cipla ousts Ranbaxy as m-cap leader in pharma

Cipla, with a market cap of Rs 16,577 crore, has displaced the market capitalisation leader Ranbaxy Laboratories to emerge a new market leader on Wednesday among pharmaceutical companies.

The company has regained the top position after a gap of almost five years. Earlier on April 6, 2001, Cipla had outpaced Ranbaxy, which happened to be the market leader at that time as well.

After remaining the market cap leader for the past five years, Ranbaxy Labs with a m-cap of Rs 15,134 crore was relegated to the second position on Wednesday.

Sun Pharmaceuticals stands third with a market cap of Rs 14,850 crore, followed by GlaxoSmithKline Pharmaceuticals (Rs 11,448 crore) at the fourth and Dr Reddy's Laboratories (Rs 9,120 crore) at the fifth positions.

In December 2004, Cipla was ranked number three with a m-cap of Rs 9,333 crore after Ranbaxy (Rs 22,939 crore) and Sun Pharmaceuticals (Rs 10,357 crore), and the company moved to the second position at the end of December 2005 by pushing Sun Pharma to the number three slot.

Cipla's market price, in the last one week, appreciated 25 per cent to Rs 552.85 on Wednesday, from Rs 441.85 on February 2, on the back of it announcing a board meeting for bonus shares.

Ranbaxy, on the other hand, has gained 3.60 per cent to Rs 406.35, from Rs 392.25, during the same period.

The company has increased its m-cap by almost 24 times in a decade from a market cap of Rs 649.48 crore recorded in December 1995, when it was ranked seventh. In comparison, in the same period, Ranbaxy market cap has seen just a four-fold growth.

The Cipla board of directors will meet on February 11 to consider the bonus shares and increase the limit of foreign institutional investors' (FIIs) investment. FIIs hold 18.78 per cent stake in the company at the end of December 2005 quarter.

Cipla last paid bonus shares in 1999, in the ratio of 2:1 (two equity shares for every one share held). Earlier in 1994, the company had announced a generous 5:1 bonus issue.

In all, Cipla has awarded bonus issues six times to its shareholders since 1980. The minimum bonus issue that the company had allotted was 1:1 in 1980, 1986, 1988 and 1992. Ranbaxy Labs, too, declared bonus shares six times, and last paid bonus in the ratio of 3:5 in 2002.

Sun Pharma, GlaxoSmithKline, Dr Reddy's, Nicholas Piramal and Aurobindo Pharma all gave bonus shares three times each, while Aventis Pharma and Glenmark Pharma issued six times each. In overall m-cap ranking, Cipla stands at number 30, while Ranbaxy Labs is ranked 33rd and Sun Pharma 34th.

For the quarter ended December 2005, Cipla reported 40 per cent rise in net profit to Rs 175.31 crore y-o-y, while Ranbaxy posted 36 per cent increase in its net profit to Rs 97.99 crore y-o-y and Sun Pharma 39 per cent to Rs 108.31 crore y-o-y.