Banking and Pharma Stocks Lead the Losses

Mon, 9 Nov 01:30 pm

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Following a negative trend since the opening of the trading day, the Indian indices have continued to remain under pressure in the post noon trading session. Sectoral indices are trading on a negative note with stocks from the capital goods, pharma and banking sectors bearing the maximum burnt.

The BSE-Sensex is trading lower by 312 (down 1.2%) and the NSE-Nifty is trading down by 97 points (down 1.2%). The BSE Mid Cap index is trading marginally lower while the BSE Small Cap index is trading up by 0.3%. Gold prices, per 10 grams, are trading at Rs 25,709 levels. Silver price, per kilogram, is trading at Rs 35,130 levels. Crude oil is trading at Rs 2,971 per barrel. The rupee is trading at 66.37 to the US$.

FMCG stocks are trading mixed with Wadala Commodities and United Spirits leading the gains. As per a leading financial daily, Nestle India today relaunched its popular Maggi noodles in India. This is five months after the ban on Maggi noodles due to alleged presence of excessive lead content. Besides, the company has partnered with online marketplace Snapdeal for the rollout.

The company has stated that all the samples of Maggi Noodles Masala have been cleared by three National Accreditation Boards for Testing and Calibration Laboratories which are accredited labs as mandated by the Bombay High Court. The company has conducted 3500 tests representing over 200 million packs in both national and international accredited laboratories. All of the reports for these tests came out clear.

The company is presently manufacturing Maggi noodles at three locations, namely Nanjangud (Karnataka), Moga (Punjab) and Bicholim (Goa). The company is also in the process to obtain directions for commencing manufacture in Himachal Pradesh and Uttarakhand.

Nestle India's September quarter was severely hit due to non-sales of Maggi noodles. Its net profit slumped 60% YoY to Rs 1.24 billion during the quarter. Net sales fell 32% YoY to Rs 17 billion largely due to the impact of Maggi noodles. In addition to loss of sales from the business disruption, net sales worth Rs 153 million have been reversed during the quarter in relation to Maggi Noodles stock being withdrawn from trade partners and market.

Nestle India Ltd is one the biggest players in the FMCG segment. It has its presence in milk & nutrition, beverages, prepared dishes & cooking aids & chocolate & confectionery segments. Presently, its stock is trading up by 0.2%.

Stocks in the pharma space are trading on a negative note with Sun Pharma and Dr. Reddy's Laboratories leading the losers. Glenmark Pharmaceuticals has announced that it has been granted final approval by the United States Food & Drug Administration (USFDA) for Clotrimazole and Betamethasone Dipropionate Cream USP, the therapeutic equivalent of Lotrisone Cream USP of Merck, Sharp and Dohme Corporation.

According to IMS Health sales data for the 12 month period ending September 2015, the Lotrisone Cream USP has achieved annual sales of approximately US$ 82 million.

On a separate note, the company has recently approved resolutions for raising funds for an amount not exceeding US$ 500 million through issuance of securities.

The company for its September 2015 quarter has reported a 20% YoY jump in its consolidated net profit to Rs 1.9 billion. The same was driven by good growth in India, US and Europe. Sales for the formulation business in India rose 27% during the quarter on a YoY basis. The formulation business for US was up by 17% YoY while that for Europe was up by 22% YoY. Its consolidated revenue was up 13% YoY at Rs 19 billion.

Glenmark's current portfolio consists of 103 products authorized for distribution in the US marketplace and 63 ANDA's pending approval with the USFDA. In addition to these internal filings, the company is identifying and exploring external development partnerships to supplement and accelerate the growth of its existing pipeline and portfolio.

Scrip of Glenmark Pharma is trading down by 0.4%.