Energy, auto drive the gains

Thu, 22 Apr 01:30 pm

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The Indian markets continued to move upwards on account of sustained buying activity witnessed during the previous two hours of trade. The stocks from the energy, auto, FMCG and banking sectors are leading the pack of gainers. The stocks from the realty sector are the only ones languishing in the red.

The BSE-Sensex and the NSE-Nifty are trading higher, up by around 205 points and 56 points respectively. The BSE-Midcap and BSE-Smallcap are also trading higher, up by around 0.5% and 0.7% respectively. The rupee is trading at 44.4 to the dollar.

According to a leading business daily, pharmaceutical major Lupin has got USFDA's nod for its anti-depression drug 'Imipramine Pamoate' capsules. Mumbai based drug major's subsidiary in the US, Lupin Pharmaceuticals has won US health regulator's nod for marketing the anti-depression drug in the US in a number of strengths (75 mg to 150 mg). This drug is a generic equivalent of an anti-depressant 'Tofranil-PM' which had annual sales of around US$ 39 m for CY09. We believe that this is a positive for the company as US continues to be its leading market. In 3QFY10, Lupin registered a growth of 76% in sales of branded generics in the US. Going forward, we expect Lupin's growth to be driven by increasing scale of its US generics business and the other geographies that the company has ventured into, namely Europe, Africa, Asia and Australia. Currently Lupin is trading in the red on BSE.

India's largest vertically integrated media and entertainment company, Zee Entertainment declared its FY10 results yesterday. The company saw a topline growth of 1% YoY despite a 32% YoY decline in revenue from syndication, film distribution and education sales in FY10. The company's advertising revenue grew by 1% YoY, while subscription revenue grew by 9% YoY. Zee Entertainment managed to expand EBITDA margins by 3% on back of lower programming, operating and staff costs. Backed by higher operating margins and lower finance charges, its bottomline grew by 19% YoY during FY10. However, it may be noted that the numbers of 4QFY10 and FY10 include the results of the regional general entertainment channel business (R-GEC) acquired from Zee News which makes the financial numbers a little less comparable.

Nevertheless, during 4QFY10 the company saw a significant uptick in advertising revenues which grew by 54% YoY during the period. Going forward, though we expect the advertising front to remain tightly linked to the volatile macroeconomic environment, subscription numbers will continue to remain strong. Over the long term, we believe that the TV broadcasting sector will continue to grow and that Zee will be able to capitalise on the same given its strong position in the sector. Zee Entertainment is trading in the green.