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Reports India

Indian stock market and companies daily report (March 07, 2014, Friday)

March 7, 2014, Friday, 05:20 GMT | 00:20 EST | 10:50 IST | 13:20 SGT
Contributed by Angel Broking

Indian Markets are expected to open in green tracking positive opening in most of the Asian indices.

The US markets finished Thursday generally higher, with investors focusing on a number of economic reports and speeches from several Federal Reserve officials as well as remarks from the ECB President Mario Draghi, after the European central bank left the interest rates unchanged. The strength seen early in the session came following the release of a report from the Labor Department showing that initial jobless claims dropped to 323,000 in the week ended March 1st, a decrease of 26,000 from the previous week's revised figure of 349,000. The data represents an upbeat sign for the labor market ahead of monthly jobs report scheduled to be released today. Meanwhile, European stocks were little changed on Thursday, giving back modest early gains after European Central Bank Mario Draghi hinted that policy makers have no plans for further monetary stimulus.

The Indian markets rose higher on Thursday, adding to the previous session's rally. An improvement in CAD, positive global cues and consistent support from foreign institutional investors (FIIs) fueled the rally.

Markets Today

The trend deciding level for the day is 21,456 / 6,382 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 21,583 - 21,652 / 6,425 - 6,449 levels. However, if NIFTY trades below 21,456 / 6,382 levels for the first half-an-hour of trade then it may correct 21,387 - 21,261 / 6,358 - 6,316 levels.

ONGC to buy stake in IOC at Rs.220/share

ONGC and Oil India are likely to buy a 10% stake in Indian Oil Corporation (IOC) from the government at Rs.220/share. ONGC is likely to buy 5.0% stake which will result in cash outflow of ~Rs.2750cr. ONGC currently holds an 8.8% stake in IOC. ONGC has a strong balance sheet with strong annual operating cash flows (FY2013 operating cash was Rs.44,700cr). Hence, additional investments to buy stake in IOC is unlikely to have material impact on the company's financials. However, given the recent rise in the stock price of ONGC, we recommend Neutral rating on the stock.

Lupin Receives FDA Approval for Generic Monodox Capsules and Cipro for Oral Suspension

Lupin Limited announced that it has received final approval for its Doxycycline Capsules USP, 50 mg, 75 mg, and 100 mg from the United States Food and Drugs Administration (FDA) to market a generic version of Aqua Pharmaceuticals Monodox Capsules 50 mg, 75 mg, and 100 mg. Lupin's Doxycycline Capsules 50mg, 75mg and 100mg are the AB-rated generic equivalents of Aqua Pharmaceuticals, LLC's Monodox Capsules 50mg, 75mg and 100mg and are indicated in the treatment of infections caused by various microorganisms and as an adjunctive therapy in severe acne.

The Company also received final approval from the FDA for its Ciprofloxacin for Oral Suspension, 5 g/100 mL (250 mg/5 mL) and 10 g/100 mL (500 mg/5 mL) to market a generic version of Bayer HealthCare Pharmaceuticals, Inc.'s (Bayer) Cipro for Oral Suspension 5 g/100 mL and 10 g/100 mL. Lupin's Ciprofloxacin Oral Suspension, 5 g/100 mL (250 mg/5 mL) and 10 g/100 mL (500 mg/5 mL) is the generic equivalent of Bayer's Cipro Oral Suspension 5 g/100 mL (250 mg/5 mL) and 10 g/100 mL (500 mg/5 mL) and indicated for the treatment of infections caused by susceptible isolates of the designated microorganisms in various conditions and patient populations. Lupin is the first applicant to file an ANDA for Cipro Oral Suspension 250 mg/ml & 500 mg/ml and as such is entitled to 180 days of marketing exclusivity.

Lupin Pharmaceuticals Inc. (LPI), the company's US subsidiary would commence marketing the products shortly. Monodox Capsules had annual U.S sales of US $180.6mn (IMS MAT Dec, 2013) whereas Cipro® Oral Suspension had annual U.S sales of US$ 8.6mn (IMS MAT Dec, 2013).

While the Cipro Oral suspension, has small market, it wonRs.t contribute greatly to the sales and the net profit numbers respectively. On the other hand the Doxycycline Capsules, has already six players apart from the innovator, and hence, we expect the product to contribute around US $5mn on the sales front. We remain neutral on the stock.

Sadbhav Engineering terms allegations of siphoning money as baseless

According to a media report, the Company Law Board (CLB) has passed an interim order for conducting forensic audit of the accounts of Bijapur-Hungud Tollway, a subsidiary of Sadbhav Engineering. It also alleges that the company has understated toll revenue from the project as well as siphoned off Rs.200cr from the subsidiary.

The company has termed these allegations as incorrect and baseless. The company admits that a minority shareholder had made allegations of diversion of funds before CLB. However, the company has clarified that CLB had not confirmed these allegations. Its interim order had merely permitted the shareholder to inspect the statutory records of the project and directed the company to install a system to have online viewing facilities of the toll-booths. Further, High Court of Gujarat in its 21st Feb, 2014 order stayed CLB's order on the matter.

Post the news, the company's stock had fallen almost 20% to Rs.73. However, after the company's clarification, the stock recovered most of its losses to close only ~3% down from day's opening price. We recommend Neutral rating on the stock.

Economic and Political News

- Gems and jewellery imports in India raise by 8% to Rs.15,161cr in January

- India economy to grow at 5.6% in 2014-1 5: India Ratings

- RBI to conduct 14 day term repo variable rate auction of Rs.39,000cr today (on March 7, 2014)

- Steel consumption inches up 0.7% in April-February

Corporate News

- Central Bank of India sells entire stake in CIBIL to Transunion International

- Genpact to repurchase shares worth US$300mn

- Loha Ispaat fixes price band at Rs.77-80 per share

- S&P upgrades Airtel's credit rating to BBB-

- SAIL-led consortium hopes to buy foreign coal mines soon

- Sun Pharma looks to enter Japan's generics market

- Tata Motors launches low-priced trucks under Prima range

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