Bajaj touches its all-time high

Fri, 26 Mar 01:30 pm

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While still in the green territory, the Indian markets continued to trade in a range bound manner during the previous two hours of trade. Stocks from across sectors are trading firm at present. Those from the auto, consumer durables, oil & gas and metals spaces are leading the pack of gainers. Stocks from the IT pack are trading lower.

The BSE-Sensex and the NSE-Nifty are trading higher, up by around 75 (4%) points and 20 points (4%) respectively. The BSE-Midcap and BSE-Smallcap are also trading higher, up by around 0.8% and 0.5% respectively. The rupee is trading at 45.36 to the dollar.

Auto stocks are currently in demand as the BSE-Auto Index is trading higher by about 1.4%. The stocks leading the pack of gainers include Bajaj Auto, M&M, Maruti Suzuki and TVS Motor. Bajaj Auto is trading higher by 4.4% on the back of it expecting a strong 40% YoY increase in volumes during the next financial year. Volumes are pegged at about 4 m units next year. This would include nearly one-fourth of sales volumes to be met through exports. The company’s management has set a target of selling over 3.6 m motorcycles and about 0.4 m commercial vehicles. For achieving the same, the company is planning on expanding the overall capacity by about 25%. This will take its capacity to nearly 5 m units. At present Bajaj Auto’s vehicle manufacturing capacity stands at about 4 m units. Of this, about 3.6 m comprises of two-wheelers and the balance is of three-wheelers.

Incidentally, the stock of Bajaj Auto has hit its all-time high today. It may be noted that the stock of Bajaj Auto has by far outperformed the stock of its rival company Hero Honda over the past year. This is on the back of the company recording a much higher year on year growth in volumes. Key reasons for the same were the strong performance of the new launches made by the company. Also, the renewed focus on semi-urban and rural markets aided sales volumes. The fact that the company has a strong foothold in urban markets helped it boost volumes.

Healthcare stocks are currently trading firm led by Glenmark Pharmaceuticals, Panacea Biotec, Ranbaxy and Sun Pharmaceuticals. Glenmark Pharmaceuticals’ US subsidiary Glenmark Generics has announced that it has received the final approval from the US FDA for Calcipotriene ointment 0.005%. A leading business daily has reported that this ointment was marketed by another company named Leo Pharmaceuticals as Dovonex. It is believed that this brand recorded peak sales of approximately US$ 93 m (approx Rs 4.3 bn) during CY06. Leo Pharmaceuticals still markets and distributes a line of Dovonex products including a cream and a topical solution. Glenmark’s version of this ointment is used for treating plaque psoriasis (a chronic skin disease) in adults. This is a positive for the company and will enable it to bolster its revenues from the highly competitive US generics market.