Analyzing Profitability of Indian Pharmaceutical Sector: A Comparative Study of Select Domestic and Multinational Companies

In mid-1991, the liberalization process that has been taken by the government of India, made a path to multinational companies (MNCs) to access the Indian markets resulting in tremendous competition in market. With the change in the economic scenario, a paradigm change in the Indian pharmaceutical industry has also become inevitable. International and national level mergers, acquisitions and takeovers have now become a common phenomenon in the pharmaceutical industry. In coming days, with the help of international financial companies the MNCs may capture and take control of Indian companies to exercise control over the Indian market. To match the situation created by international mergers and takeovers, Indian companies are adopting the same path. Some of them have been able to adapt themselves to the new situation while the others are struggling. So, it is high time to measure the profitability of the industry. In this backdrop, the present study seeks to make a comparison, particularly in respect of performance of different financial aspects, between multinational and domestic companies in the Indian pharmaceutical industry during the fifteen year period from 2003-04 to 2017-18. The sample size of the study consists of twenty pharmaceutical companies by taking ten companies from each of the multinational and domestic sectors. The issue has been tackled using appropriate statistical measures.