‘Buy’ Lupin with a target price of R2,550 a share. We value Lupin at 27x March 2017e forward earnings, at a premium to the valuation band (21-23x) for the sector. We believe this is warranted, given Lupin’s consistent delivery (in terms of business mix, return ratios and execution) and superior preparedness to target longer-term growth.

The stock stands out among peers, given a healthy geographic mix (80%-plus sales from India, the US and Japan), differentiated products and robust financial metrics. It has made good progress in efforts to move up the value chain in terms of product (from APIs to formulations) and markets (from less regulated to regulated markets), and we believe it is now entering a high- growth phase, with multiple drivers: 1) Big product rollout in the US, including niche/PIV opportunities; 2) Growth in emerging markets (including India) and Japan; and 3) margin improvement by back-ending sourcing to India from Japan, and rising US sales.

Robust growth in recurring EPS (30% CAGR over FY15-18e) and healthy capital efficiency support our positive view.

Lupin’s robust US pipeline, regulatory breathing space and limited EM exposure provides high leverage to faster FDA approvals (16 in 5m FY16 versus 12 in FY15), in our view.

Share price of city gas companies Indraprastha Gas Ltd (IGL) and Gujarat Gas moved northward in the afternoon trade following reports that the price of natural gas from domestic fields would drop by 18 per cent to $4.24/mBtu from October 1. (PTI)

Share price of city gas companies Indraprastha Gas Ltd (IGL) and Gujarat Gas moved northward in the afternoon trade following reports that the price of natural gas from domestic fields would drop by 18 per cent to $4.24/mBtu from October 1. Till now, the price is $5.18/mBtu.

At 12.58 pm, IGL and Gujarat Gas were trading 4.60 per cent and 2.58 per cent up at Rs 482.20 and Rs 518.20, respectively.

IGL shares opened at Rs 461.90 and had touched a high and low of Rs 498.40 and Rs 491.90, in trade so far. Similarly, Gujarat Gas opened at Rs 510 and had touched a high and low of Rs 530 and Rs 505, in trade. Sensex was up 0.99 per cent at 26,034.10.

The price would be valid for the next six months. The price of domestic natural gas is decided based on a formula approved by Narendra Modi-government in October last year, which is linked to global indices.

“Gas companies like IGL and Gujarat Gas would be beneficiary but its pass on model so if they do not pass full benefit than we could expect margin expansion in 3QFY16,” Emkay Global said in a note.

Shares of housing finance companies were trading in green in the morning trade. The share price of LIC Housing Finance, Dewan Housing Finance and Gruh Finance jumped 3.10 per cent, 1.37 per cent and 0.97 per cent to Rs 464.45, Rs 218 and Rs 269.85, respectively. (Photo: Reuters)

Real estate shares continued their rally for fifth straight session as the BSE Realty index went up over 2 per cent intra-day on Wednesday. The real estate index gained around 5 per cent in the past four trading session till September 29. The index jumped 1.99 per cent on Tuesday following cut in benchmark lending rates by Reserve Bank of India. The central bank cut repo rate by 50 basis points to 6.75 per cent from 7.25 per cent earlier.

In the morning trade (at 11.10 am), shares of realty majors such Godrej Properties, Oberoi Realty, Ashiana Housing and Prestige Estates were trading 7.34 per cent, 4.20 per cent, 3 per cent and 2.79 per cent up at Rs 328.35, Rs 267.75, Rs 186.90 and Rs 215.80, respectively.

Nirmal Jain, chairman, IIFL Holdings termed the RBI’s decision to cut larger-than-expected as a “game-changing event”. “The RBI has done its bit with a larger cut. The government should accelerate the reforms process now,” Jain said.

Getamber Anand, president, Confederation of Real Estate Developers’ Association of India, said, “The industry is welcoming RBI Governor’s announcement of rate cut by 50 basis points, this was long overdue. Not only in real estate, but across the manufacturing industries and businesses, everyone is feeling encouraged by this announcement.”

Shares of housing finance companies were also trading in green in the morning trade. The share price of LIC Housing Finance, Dewan Housing Finance and Gruh Finance jumped 3.10 per cent, 1.37 per cent and 0.97 per cent to Rs 464.45, Rs 218 and Rs 269.85, respectively.

In the monetary policy on Tuesday, the RBI said that it is proposed to reduce the risk weights applicable to lower value but well collateralised individual housing loans. Currently, the minimum risk weight applicable on individual housing loans is 50 per cent.

On a year-to-date basis, the share price of Eveready Industries jumped 56 per cent to Rs 280.40 on September 29. The BSE Sensex declined 6.28 per cent during the same period. (Photo: Reuters)

Shares of Eveready Industries India gained as much as 6.99 per cent in the early trade on Wednesday after the Reserve Bank of India on Tuesday allowed foreign investors to invest up to 49 per cent stake in the company under the Portfolio Investment Scheme.

At 9.41 am, Eveready Industries shares were trading 3.78 per cent up at Rs 291 apiece. The scrip opened at Rs 295.40 and had touched a high and low of Rs 300 and Rs 290.50, in trade so far. Sensex was up 0.69 per cent at 25,957.

“Foreign Institutional Investors (FIIs)/Registered Foreign Portfolios Investors (FPIs) can now invest up to 49 per cent of the paid up capital of Eveready Industries India Ltd under the Portfolio Investment Scheme (PIS),” RBI said in a release.

As per data on BSE, FIIs held 16.29 per cent stake in the company as of quarter ended June 2015. FIIs, NRIs and PIOs (Persons of Indian Origins) can invest in primary and secondary capital markets in India through PIS.

On a year-to-date basis, the share price of Eveready Industries jumped 56 per cent to Rs 280.40 on September 29. The BSE Sensex declined 6.28 per cent during the same period.

For the quarter ended June 2015, the company posted net profit of Rs 15.89 crore, up 49.88 per cent, against Rs 10.60 crore in the corresponding quarter a year ago.

The BSE Sensex and NSE Nifty opened in green tracking firm global cues. Sensex opened 207.86 points up at 25,986.52.

10.58 am: Majority of auto shares were trading in the green on Wednesday as the BSE Auto index went up by 0.5 per cent. Shares of Tata motors and Ashok Leyland went up by 2.13 per cent and 0.99 per cent, respectively. The fall in global commodity prices have helped the auto makers to improve their margins as steel is the key raw material used by the sector, experts said. London-based investment banking firm HSBC said in a note to investors that the near term scenario for auto companies looks positive despite lacklustre two-wheeler and four-wheeler industry trends. Sensex was up 206 points, or 0.80 per cent, at 25,985.

10.20 am: The rupee rose by 19 paise at 65.77 against the US dollar in early trade on Wednesay at the Interbank Foreign Exchange after the Reserve Bank cut interest rates by 0.50 per cent yesterday.

10.17 am: After surging over 10 per cent on Tuesday, shares of Lanco Infratech jumped over 8 per cent in the morning trade on Wednesday. In a BSE filing on September 29, Lanco Infratech said, “The company has been communicating to the stock exchange and also to the shareholders/ general public that the company is keen in selling its stake in some assets of the company which is as per the CDR package and subsequent JLF approvals, to reduce the debt burden and to bring liquidity into the company.” Company has already sold 2 of its assets namely Udupi Power Corporation Ltd (1200 MW Thermal Power Project) and Lanco Budhil Hydro Power Private Ltd (70 MW Hydro Power Project), which reduced the consolidated debt of the company.

9.50 am: Shares of Eveready Industries India gained as much as 6.99 per cent in the early trade on Wednesday after the Reserve Bank of India on Tuesday allowed foreign investors to invest up to 49 per cent stake in the company under the Portfolio Investment Scheme.

9.30 am: Bank of India has decided to change its Base Rate to 9.70 per cent from the present level of 9.95 per cent effective from October 5, 2015. Shares of Bank of India were trading 0.69 per cent up at Rs 138.80 apiece in the early trade. The BSE Bankex was up 0.45 per cent at 19,858. Sensex was up 233 points at 26,012.

Bank of India has reported a 84% decline in net profit at Rs 129.72 crore in the April-June quarter of the current fiscal. The bank had a net profit of Rs 805.69 crore in the first quarter of 2014-15 fiscal. Provisioning during the first quarter rose to Rs 1,515 crore, from Rs 893 crore in the same period last fiscal. The gross Non-Performing Assets (NPAs) as a percentage of total loans spiked to 6.80% during the June quarter, from 3.28% in the year-ago period.

9.22 am: Sensex was up 211.27 points at 25989. Tata Steel and Hindalco were up over 2.88 per cent and 2.71 per cent at Rs 207.15 and Rs 70, respectively.

9.17 am:

Source: BSE

The BSE Sensex and NSE Nifty opened on a positive note on Wednesday following firm global cues amid a rate cut of 50 bps by the Reserve Bank of India in its monetary policy review on Tuesday. Sensex opened 207.86 points up at 25,986.52. Nifty opened 80.95 points up at 7,924.25. Metal stocks were trading higher in the opening trade.

Traders also got some support with a report that India has become the top destination for FDI in the world. With $31 billion of foreign capital inflows, India has surpassed China and the US to take the pole position in attracting largest FDI in the first half of 2015.

Asian stocks took an early positive lead from Wall Street, which ended slightly higher overnight as the US bourses took a breather, with the latest round of China fears that gripped global markets petering out for the moment. Investors also felt relief as shares of mining and trading giant Glencore gained more than 10 per cent overnight.

Hang Seng, Nikkei and Shanghai were up 0.94 per cent, 1.84 per cent and 0.38 per cent at 20749.60, 17243.21 and 3049.68, respectively.

Dow Jones Industrial Average gained 0.30 per cent at 16049.13 on Tuesday.

(With inputs from agencies)