Markets up on FMCG stocks

Tue, 8 Jun 01:30 pm

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Indian markets continued to trend higher on the back of buying interest in index heavy weights during the last two hours of trade. Strong buying interest was seeing in FMCG and auto stocks while profit booking was observed in stocks from the oil & gas and realty space.

The BSE-Sensex is up by 80 points while NSE-Nifty is trading 27 points above the dotted line. BSE-Midcap index is up by 0.8% while BSE-Smallcap index is trading 0.9% above yesterday’s closing. The rupee is trading at 46.95 to the US dollar.

Stocks from the hotel sectors are trading up with Indian hotels and Hotel Leelaventures leading the pack. As per a leading news daily, premium hotels across the country are witnessing increase in RevPAR (total room revenue by total rooms). As per data compiled by Crisil Research, RevPAR increased by 8% YoY from Rs 5,135 to Rs 5,533 for April 2010. This was on the back of increase in occupancy rates as average room rates continue to be under pressure. In fact, average room rates fell by 2.7% YoY in April to Rs 8,300 while occupancy rates improved from 60% to 67% in the same period. Though this shows that the hospitality sector has turned the corner, it should be kept in mind that the sector still has a long way to go to reach the room rate and occupancy rates it enjoyed in 2008. The room rates in April 2008 were Rs 11,800 while occupancy rate was 76%.

Healthcare stocks are currently trading firm led by Elder Pharma, Glenmark Pharmaceuticals and Dishman Pharna. The stock of Glenmark Pharmaceuticals is trading firm on news of the court rejecting Abbott-Sanofi’s plea for the drug ‘Tarka’, which is used for treating hyper tension. A few weeks ago, Glenmark Pharmaceutical’s arm, Glenmark Generics had received the approval of the US FDA (food and drug administration) to launch the generic version of ‘Tarka’. However, Abbott-Sanofi filed a case against the Indian company to prevent it from selling the generic version of the drug in the US markets. However, with the case going in favour of Glenmark, it would be able to market the drug on a relatively much stronger ground. It is believed that Glenmark will be launching the drug within the next few days. The market size for Tarka is believed to be about US$ 60 m (approx Rs 2.7 bn). The company’s management had earlier mentioned that it would be in a advantageous position, even after the 180-days exclusivity period as there are not many players selling this drug in the market.