Evaluating Profitability Trends in Selected Indian Pharmaceutical Companies

Abstract

Using a primary focus on important financial variables and their influence on financial performance, this report offers a thorough profitability analysis of top pharmaceutical businesses in India. Through the analysis of variables including ROE, ROA, net profit margin, and gross profit margin, the study assesses how these businesses maintain profitability in the face of legislative changes and international competition. To examine the impact of R&D expenditure, cost of goods sold (COGS), and operating expenses on profitability, the analysis uses regression and t-tests. Results show that while greater COGS and operating expenses are detrimental to profitability, R&D investment has a beneficial impact. According to the regression study, R&D expenditure has a positive impact on profitability, whereas COGS and operating expenses have a negative effect. These variables also exhibit significant coefficients. Operating expenses, COGS, and R&D investment are the three variables that are shown to have a major impact on financial outcomes. T-tests support the statistical significance of these correlations. The study also emphasizes the impact of differences in market share and revenue sources on profitability, showing that companies with greater export income and less regulatory restrictions typically have stronger financial performance. To improve competitiveness in the pharmaceutical industry, stakeholders such as legislators and business experts can benefit greatly from this research's insightful recommendations on how to maximize financial plans and operational effectiveness.