Research Paper Impact Factor: 5.471 Peer Reviewed & Indexed Journal IJBARR E- ISSN -2347-856X ISSN -2348-0653 International Journal of Business and Administration Research Review. Vol.6, Issue.1, Jan-Mar 2019. Page 157 MAXIMIZATION OF SHAREHOLDERS WEALTH: A STUDY ON INDIAN PHARMA COMPANIES Sri Ayan Chakraborty Management: University Program (Techno India University), ICA Eduskills. Abstract Value Based Analysis is a continuing process which focuses in maximising Shareholders’ Wealth. It is applied to evaluate the financial performance as well as the shareholders’ value generated by a Company.Traditional analysis do not take into consideration a firm’s cost of capital, and are therefore considered inappropriate in evaluating value creation. Moreover, Traditional measures are based almost exclusively on information obtained from financial statements, and so are exposed to accounting distortions.Despite these limitations analysts and investors still widely apply the traditional measures.On the other hand, as a result of the perceived limitations of traditional measures, value based financial performance measures were developed. In compare to traditional methods value based measures report high levels of correlation between the Profitability and Market Return.In those cases where these measures yield positive values, economic profits are generated, and consequently shareholder value is expected to increase. Negative values indicate the destruction of shareholder wealth. Economic Value Added (EVA), Market Value Added (MVA), Enterprise Value (EV) are considered as important criterion for evaluation of internal performance and total return of Shareholders. On the other hand, stock return is another key factor in decisions of the stock. It provides some information which has been used by many potential and actual investors for financial analysis and prediction. Value Added Analysis is a measure of true economic performance of a company and a strategy for creating shareholder wealth. Investing in projects where the return exceeds the cost of capital results in value creation, while investing in projects with returns below the cost of capital destroys value. EVA is the difference between Net Operating Profit after Tax and Cost of Equity multiplied by Capital Employed. MVA is the difference between Market Value of Equity and Shareholders Fund while EV is the difference between Market Cap plus Market Value of Debt and Cash & Cash Equivalents. The study aims at evaluating the relationship between EVA, MVA, EV, PAT, NOPAT & EPS, MPS, ROCE, ROE, ROA as well as impact of EPS MPS ROCE ROE ROA EVA / CE of Leading Indian Pharma companies. Keywords: NOPAT, EVA, Market Cap, MPS, EPS, MVA, EV, CFROI, ROCE and ROE. I. Objectives of the Study 1. To analysis the profitability, Liquidity, Operating Efficiency & Valuation Ratios of leading Indian Pharma Companies as well as calculate the market values like EVA, EV, MVA etc. 2. To analyse the performance in terms of Economic Profit of the selected companies using Value Based Analysis. 3. To highlight the impact of Profitability & Rate of Return ratios on EVA/ Capital Employed. Review of Literature The researcher and economists have recognized that the measurement of profitability is necessary to analyse and improve the financial performance of the sector. A large number of studies have been conducted in the field of Value based Management. A brief review of some of these studies has been presented. 1. In 1990, Joel Stern, managing partner of M/s Stern Stewart & Co. introduced the modified concept of economic profit named Economic Value Added (EVA) as measure of business performance in order to overcome the limitations of accounting based measures. EVA-based financial management and incentive compensation scheme gives manager better quality information and helps to analyse the Shareholders’ wealth. EVA is a performance