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Reports India

Indian stock market and companies daily report (August 08, 2014, Friday)

August 8, 2014, Friday, 05:18 GMT | 00:18 EST | 09:48 IST | 12:18 SGT
Contributed by Angel Broking

Indian markets expected to open on Negative note tracking SGX Nifty and the Asian markets.

U.S. indices fell, sending the Dow Jones Industrial Average to the lowest level since April, as concern that the Ukraine conflict is escalating offset drop in American jobless claims.

European stocks fell to their lowest level in more than three-and-a-half months as European Central Bank President Mario Draghi warned that geopolitical risks in countries such as Ukraine could hurt the economic recovery.

Back home, Indian indices closed negative after immense volatile trading session. Market fell in later part of trading session as European market slipped into red ahead of the outcome of monetary policy review from European central Bank and Bank of England.

Markets Today

The trend deciding level for the day is 25,631 / 7,663 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 25,736 - 25,883 / 7,695 - 7,741 levels. However, if NIFTY trades below 25,631 / 7,663 levels for the first half-an-hour of trade then it may correct 25,484 - 25,379 / 7,617 - 7,584 levels.

Zydus receives final approval for Potassium Citrate ER Tablets

Zydus Cadila has received the final approval from the USFDA to market Potassium Citrate ER Tablets 5, 10 and 15 mg, used in the prevention of kidney stones. The estimated sale in 2014 for Potassium Citrate ER Tablets is US$ 131.7mn, as per IMS. The drug is a limited competition product as of now and hence for the product the company can gross sales of US$30-40mn on an annual basis.The group now has 94 approvals and has so far filed 239 ANDAs since the commencement of the filing process in FY 2003-04. We maintain our accumulate with a target price of Rs. 1209.

Result Review

Aurobindo Pharma (CMP: Rs.722/ TP: / Upside:)

Aurobindo Pharma, announced its 1QFY2015 numbers, much ahead of expectations. The company posted revenue of Rs.2895cr V/s Rs.2,450cr expected, 70.3% yoy, lead by 106.7% yoy growth in the formulations, while the API grew by 3.6% yoy. Thus, the formulations, now constitute around 77.2% of sales while API was around 22.8% of sales. Also, during the quarter, the company started integrating the western European business of Actavis, which aided the European formulation business to grow by 359.0% yoy, while USA grew by 78.6% yoy. ROW formulations on the other hand grew by 24.5% yoy. On the operating front, the EBITDA margins came in at 22.2% V/s 16.7% expected, an expansion of 548bps yoy. This was on back of the Gross margins expansion, which expanded by 474bps, on back of sales mix. Thus, the Adj. PAT came in at Rs.415cr V/s expected Rs.282cr, up 142.2% yoy. We maintain our neutral rating on the stock.

Vesuvius India - 2QCY2014 Review (CMP: Rs.788/ TP:- / Upside:-)

For 2QCY2014, VIL reported poor set of numbers. Top-line came in at Rs.158cr, a 4% yoy decline and 9.1% below our expectation of Rs.173cr. Led by 479bp yoy increase in raw material cost (as a percentage of sales) to 57.4%, the EBITDA margins shrank by 471bp yoy to 15.4%. As a result, the net profit for the quarter declined by 20.2% yoy to Rs.1 4 vis-a-vis our expectation of Rs.18cr.

For 1HCY2014 the top-line has increased by 5.5% yoy to Rs.313cr. EBITDA margins have witnesses a decline of 372bp yoy to 1 6.5% largely due to 381bp yoy increase in raw material cost as a percentage of sales. The EBITDA has declined by 13.9% yoy to Rs.51cr. At current market price, the stock is trading at PE of 19.8x for CY2015E. We have a Neutral view on the stock.

Economic and Political News

- Indian economy expected to grow by 5.5% in current fiscal: UN report

- FDI not to be allowed in railway operations sector: Govt

- Gas price hike to push up power, urea production costs

Corporate News

- GVK's Srinagar project still not recovered from shock of last year's deluge

- HC issues notices to Gujarat, Adani Power on PIL alleging damage

- RCom receives Rs. 650 cr from promoter group

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