IMPACT OF KEY FINANCIAL INDICATORS ON SUSTAINABLE GROWTH IN INDIAN PHARMACEUTICALS: A COMPARATIVE PRE- AND POST-COVID STUDY
DOI:
https://doi.org/10.55829/m1wb3d88Keywords:
Sustainable Growth Rate (SGR); Net Profit Ratio (NPR); Return on Capital Employed (ROCE); Return on Net Worth (RONW); EBITDA; Financial Performance; COVID-19 Impact; Capital Efficiency.Abstract
In this research, authors analyze the interaction of the main financial indicators Net Profit Ratio (NPR), EBITDA, Return on Capital Employed (ROCE) and Return on Net Worth (RONW)) to the Sustainable Growth Rate (SGR) of Indian pharmaceutical firms and compare the results between the pre-COVID (20152019) and post-COVID (20202024) period. The main goal will be to determine the way the importance and influence of these financial variables of sustainable growth developed in accordance to macroeconomic disturbance. Based on a strong sample of publicly traded pharmaceutical corporations, the analysis makes use of Pearson correlation and multi-regression to figure out solid connection and causal influence between them amid the two periods. The results demonstrate that before the advent of the COVID-19 pandemic, a prevalence of drivers based on the returns existed and the only material predictor of SGR was RONW. The model itself, however, still in the post-COVID market, names only a single positive significant factor, and this is the indicator NPR, whereas the indicator EBITDA appears surprisingly to have a great negative influence on the SGR, reflecting the strategic switch of the focus between capital efficiency and profitability-oriented growth in an economic turmoil. The general regression models of the two periods show excellent explanatory values (R 2 > 90 %) and hence support the hypothesis that financial metrics are relevant in the prediction of Green growth. These leads to the rejection of the null hypothesis which means it has been proved that there is in existence financial indicator that has a significant and context-dependent role to play on SGR. The research has critical implications on financial managers, investors, and policy-makers in that financial solutions should only be adaptive, period-specific, and according to the future economic realities and resilience-based growth goals.References
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