Pharma, metals weigh markets down

Fri, 23 Apr 01:30 pm

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On account of profit booking among index heavy weights, Indian stock markets lost some momentum during previous two hours of the trade. Currently, selling activity is being witnessed among stocks from metal, healthcare, consumer durables and auto sectors. However, stocks from banking, capital goods, energy and IT sectors are managing to find favour.

The BSE-Sensex and the NSE-Nifty are trading higher, up by around 76 points and 19 points respectively. Currently, the BSE-Midcap and BSE-Smallcap indices are trading in the green, higher by 0.2% and 0.4% respectively. The Rupee is trading at 44.49 to the Dollar.

A mid-sized Indian IT company, Mindtree has announced that it will acquire 7Strata, a Chennai based remote infrastructure management firm in an all cash deal worth Rs 72 m. It expects to close the deal by first week of May. As a part of the agreement, the core management and delivery team of 7Strata will become a part of Mindtree Infrastructure and technical support division

We believe that this acquisition will benefit the company in increasing its revenue from infrastructure management services business. It may be noted that Nasscom estimates this industry to have grown by over 80% from US $ 2 bn in 2006 to US$ 7 bn in 2008. In last couple of years, Indian IT companies have gained a lot of business by managing remote IT infrastructure for their clients. While Mindtree generates just 4% of its sales from this segment, IT majors like Infosys and TCS generates as much as 7% to 8% of their revenues from this segment.

As per a press release, Piramal Healthcare has signed an agreement with Bharat Serums and Vaccines (BSV) to acquire its injectible anesthetic products business. The injectible anesthetic business includes Propofol, Bupivacaine and Atracurium Besylate. This business had a sale of Rs 106 m in FY10. Of this, Propofol accounted for about 80%. This acquisition gives Piramal access to key intellectual property developed by BSV for the manufacture of injectible anesthetics products, including process-based intellectual property and business contracts. It also provides Piramal an immediate entry in the Propofol market, which according to estimates is worth US$ 825 m. Presently, BSV sells this product in 30 countries. However, with Piramal’s distribution network, this product is expected to reach 108 countries.