Pharma stocks lead the gains

Mon, 30 May 09:30 am

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Asian stock markets have opened the week on a mixed note. Stock markets in Singapore (up 0.7%), China (up 0.6%) and Hong Kong (up 0.5%) are leading the gains. However, markets in Indonesia (down 0.2%) and Malaysia (down 0.1%) are trading in the red. The Indian stock markets have opened the day on a firm note. Stocks in the healthcare, consumer durables and banking space are leading the pack of gainers.

The BSE-Sensex is trading higher by around 88 points (0.5%), while the NSE-Nifty is up by around 29 points (0.5%). Midcap and smallcap stocks are trading in the positive as well with the BSE-Midcap and BSE-Smallcap indices up by 0.7% and 0.6% respectively. The rupee is trading at 45.11 to the US dollar.

Cement stocks have opened the day on a mixed note with ACC, JK Lakshmi Cement and India Cements trading firm. However, Shree Cement, UltraTech Cement and Birla Corp are trading in the red. Shree Cement has announced its financial results for the quarter and year ended March 2011. During 4QFY11, the company's topline grew by 13% YoY. However, operating costs grew at a much higher rate of 25% YoY mainly on account of a substantial increase in raw material and power costs (as a percentage of net sales). As a result, operating profit margins dropped from 34.5% in 4QFY10 to 27.7% in 4QFY11. The company reported a loss of Rs 344 m at the Profit before Tax (PBT) level. However, tax write-backs to the tune of Rs 1,001 m led it to report a net profit of Rs 657 m during the quarter. During FY11, the company's sales and net profits declined by 3% YoY and 69% YoY respectively. The company's board has recommended a final dividend of Rs 8 per share for the financial year 2010-11.

Pharma stocks have opened the day on a firm note with Sun Pharma, Lupin and Divi's Lab leading the gains. Drug major, Lupin plans to launch nearly 50 new products within the current fiscal year. These products would be launched in the various markets of the company. Up to 12 products would be launched in US and around 30 would be launched in India as well. The company has filed 21 abbreviated new drug applications (ANDA) in the US market last year. These approvals are likely to take anywhere between 26 to 28 months for approval. Besides, the company also plans to launch nearly 10 new products in Japan to target a market size of close to US$ 3 bn. With this the company expects revenues from Japan to grow by nearly 20%. The company plans to launch 5-6 new products in Europe as well. The European business had grown by nearly 30% during FY11.