Dr Reddy’s Laboratories hit a fresh 52-week low of Rs 2,953.35 on Wednesday on concerns over Venezuela currency devaluation. (Photo: Reuters)

Dr Reddy’s Laboratories hit a fresh 52-week low of Rs 2,953.35 on Wednesday on rising concerns over Venezuela currency devaluation. Venezuela is an important market for domestic pharmaceutical companies. Dr Reddy’s earned Rs 833 crore in revenue from Venezuela in 2014-15.

At 1.35 pm, the share price of Dr Reddy’s Laboratores was down 2.05 per cent at Rs 3,008. The scrip hit a high and low of Rs 3,023.95 and Rs 2,953.35, respectively, in trade. Sensex was down 114.69 points, or 0.45 per cent, at 25,199.49.

Sarabjit Kour Nangra, vice-president, research, pharma, Angel Broking, said, “Concerns over Venezuela currency devaluation hit Dr Reddy’s Laboratories stocks on Wednesday. However, we have ‘Buy’ rating on stock with a target price of Rs 3,900.”

Dr Reddy’s Laboratories also submitted a response to the US health regulator on a warning letter it had received last month. The company in a BSE filing said, “We would like to inform that the company has submitted a response to the US Food and Drug Administration (USFDA) on December 7.

Japanese brokerage firm Nomura also has a ‘Buy’ rating on the shares of Dr Reddy’s Laboratories and believe the scrip can touch Rs 4,346 in the next few quarters.

Last month, the country’s second-largest drug maker had received a warning letter from the USFDA relating to two of its API manufacturing plants and a formulation plant in Andhra Pradesh and Telangana.

In response to the letter, Dr Reddy’s Labs, CEO GV Prasad had said the company is in the process of shifting some of the products from these plants to other facilities and considering third party assessment for its plants.”

The US agency had asked the drug maker to provide a comprehensive evaluation of the extent of inaccuracies in recorded and reported data and include a detailed action plan to fully investigate the scale and root causes of “deficient documentation and data management practices”.

In the past one year, the share price of Dr Reddy’s Labs plunged 7.36 per cent to Rs 3070.85 on December 8. Sensex fell 9.99 per cent during the same period.

(With agency inputs)

BHEL share price gained as much as 3 per cent on Wednesday after the Heavy Industries & Public Enterprises Minister Anant Geete said that the government has no plans to divest part of its holding in the company. (Photo: PTI)

BHEL share price gained as much as 3 per cent on Wednesday after the Heavy Industries & Public Enterprises Minister Anant Geete on Tuesday said that the government has no plans to divest part of its holding in the company.

At 12.13 pm, shares of Bharat Heavy Electricals Ltd were trading 2.85 per cent up at Rs 169.35. The scrip opened at Rs 166.20 and had touched a high and low of Rs 169.70 and Rs 166.20, respectively, in trade so far. Sensex was down 91.26 points, or 0.36 per cent, at 25,219.07.

“BHEL had not been performing well since the last 1-2 years. However, BHEL currently has new orders worth Rs 22,000 crore. Therefore its position will improve significantly next year,” the Minister said.

Government earlier approved the sale of 5 per cent stake in the company. It owned 63.06 per cent stake in BHEL.

In the past one year, the share price of Bharat Heavy Electricals Ltd dipped 38.30 per cent till December 8. Sensex lost 9.99 per cent during the same period.

For the quarter ended September 2015, the company posted a consolidated net loss of Rs 204.90 crore, down 264.13 per cent, against Rs 124.84 crore in the corresponding quarter a year ago.

(With inputs from agencies)

NBCC stocks will remain in focus as it has bagged projects worth Rs 192.74 crore in November. (Photo: PTI)

The BSE Sensex and NSE Nifty are likely are open in negative terrain on Wednesday following weak global cues. Back home, Sensex closed 219.78 points down at 25,310.33 on Tuesday, while NSE Nifty50 index settled 63.70 points down at 7,701.70.

Below are the stocks that are likely to be in focus today:

Amtek Auto: Shares of Amtek Auto that surged almost 11 per cent on Tuesday amid reports that fund house JP Morgan has recovered 85 per cent of the company’s bond dues will also remain in focus today.

NBCC: Stocks will remain focus in as that it has bagged projects worth Rs 192.74 crore in November.

Bharti Airtel: Airtel will launch 4G services in Rajasthan within a few days and cover other important cities in next six months.

Dr Reddy’s: The company on Tuesday said that it has submitted a response to the US health regulator on a warning letter it had received last month. In response to the letter, DRL CEO G V Prasad had said the company is in the process of shifting some of the products from these plants to other facilities and considering third party assessment for its plants.

IIFL Holdings: Canadian investor Prem Watsa’s Fairfax India Holdings (FIH) has acquired additional 21.85 per cent stake in financial firm IIFL Holdings for Rs 1,341.37 crore through an open offer.

Ashoka Buildcon: Roads developer said it has fully acquired Ashoka Path Nirman Ltd. “Ashoka Buildcon Ltd has informed… regarding acquisition of 100 per cent share capital of Ashoka Path Nirman (Nasik) Private Ltd,” the company said in a filing to BSE.

Yes Bank: It is set to mobilise up to $5 billion of funds to fight climate change by 2020.

Nalco: Aluminium major launched a joint venture with Gujarat Alkalies and Chemicals Limited (GACL) to set up a caustic soda plant at an investment of Rs 1,800 crore.

Tata steel, JSW steel, Jindal Steel, SAIL: To curb cheap steel imports from China, Japan and Korea, the government is likely to restrict inward shipments to one port, apart from introducing a floor price for imports.

The Sensex lost 0.9% to 25,310.33 points at the close in Mumbai. (Express Photo)

India’s benchmark stock index tumbled to a three-month low on Tuesday and the rupee weakened for a fifth day as investors weighed the benefits of lower energy prices against declines in global equities. The rupee dropped 0.2% to 66.84 a dollar. The currency, which fell 2.1 % last month in Asia’s worst performance, is set for the longest run of declines since August.

The Sensex lost 0.9% to 25,310.33 points at the close in Mumbai. The benchmark has fallen 8% this year and trades at 14.9 times projected 12-month earnings, the least expensive in two months. The 50-share Nifty ended down 0.8% at 7701.7 points; with this fifth straight session of losses, Indian markets now trade at about 15% below their all-time closing highs touched in early 2015.

The MSCI Emerging Markets Index has lost 17% and is valued at a multiple of 11. Overseas investors sold a net $6.3 million of Indian stocks on December 7, paring this year’s inflows to $2.9 billion. They sold $1.1 billion last month.
Asian stocks dropped 1.3% after China’s exports declined for a fifth month, while oil slid amid speculation a global glut will persist with Opec having abandoned its strategy of limiting output.

Vedanta plunged 4.5 %, extending the year’s loss to 59%. Hindalco tumbled 4.1%, the most since November18. ONGC slid 3.6% to its lowest price since May 2009as crude traded near a six-year low. GAIL India, the top gas-marketing company, tumbled the most since August 24 while Coal India lost 2.9%, a two-month low.

Market watchers said the limited progress on the goods and services Bill was a concern to investors. The Bill has been repeatedly blocked by Prime Minister Narendra Modi’s opponents. The unified sales tax is one of India’s biggest economic reforms since the early 1990s.

The weak economic data from China also hurt sentiment. China’s imports fell for a record 13th straight month, albeit at a slower-than-estimated pace. The drop is a drag on other economies as the nation’s flagging industrial plants need less raw materials while robust consumer demand hasn’t picked up fast enough to offset those declines. Oil has plunged about 40% in the past year while iron ore trades at a record low.

India’s benchmark stock index tumbled to a three-month low on Tuesday and the rupee weakened for a fifth day as investors weighed the benefits of lower energy prices against declines in global equities. The rupee dropped 0.2% to 66.84 a dollar. The currency, which fell 2.1 % last month in Asia’s worst performance, is set for the longest run of declines since August.

The Sensex lost 0.9% to 25,310.33 points at the close in Mumbai. The benchmark has fallen 8% this year and trades at 14.9 times projected 12-month earnings, the least expensive in two months. The 50-share Nifty ended down 0.8% at 7701.7 points; with this fifth straight session of losses, Indian markets now trade at about 15% below their all-time closing highs touched in early 2015.

The MSCI Emerging Markets Index has lost 17% and is valued at a multiple of 11. Overseas investors sold a net $6.3 million of Indian stocks on December 7, paring this year’s inflows to $2.9 billion. They sold $1.1 billion last month.
Asian stocks dropped 1.3% after China’s exports declined for a fifth month, while oil slid amid speculation a global glut will persist with Opec having abandoned its strategy of limiting output.

Vedanta plunged 4.5 %, extending the year’s loss to 59%. Hindalco tumbled 4.1%, the most since November18. ONGC slid 3.6% to its lowest price since May 2009as crude traded near a six-year low. GAIL India, the top gas-marketing company, tumbled the most since August 24 while Coal India lost 2.9%, a two-month low.

Market watchers said the limited progress on the goods and services Bill was a concern to investors. The Bill has been repeatedly blocked by Prime Minister Narendra Modi’s opponents. The unified sales tax is one of India’s biggest economic reforms since the early 1990s.

The weak economic data from China also hurt sentiment. China’s imports fell for a record 13th straight month, albeit at a slower-than-estimated pace. The drop is a drag on other economies as the nation’s flagging industrial plants need less raw materials while robust consumer demand hasn’t picked up fast enough to offset those declines. Oil has plunged about 40% in the past year while iron ore trades at a record low.

India’s equity markets have witnessed a sell-off by foreign investors of $900 million in the last 11 sessions, Bloomberg data showed. The selling started in May when global investors started pulling out money from emerging markets over the concerns about China’s economy. During the quarter ended September, foreign portfolio investors sold equities worth $2.57 billion.

Tuesday’s session was also bad for steel companies as the BSE Metal Index slumped 3.25%. Shares of Jindal Steel, SAIL and Vedanta slipped more than 4.5% during the session. Weak steel prices in global markets and an increase in imports from China have affected Indian steel companies during 2015. “Recent domestic steel demand data appears positive, but weak global steel fundamentals, falling global prices and imports will continue to weigh on domestic steel prices. Domestic steel prices remain under pressure, as domestic prices are largely driven by import parity and a sharp fall in Chinese steel prices has negated the 20% safeguard duty imposed on HRC in September,” said US investment banking firm Jefferies in a note to investors.

(With Bloomberg inputs)

Sun Pharma (SUNP) announced approval for gGleevec on December 4, 2015. SUNP will launch gGleevec on February 1, 2016 with 180-day exclusivity. The development is positive and in line with expectations. The key positives are: a) Gleevec is a growing product in the US, driven by price increases; b) lack of authorised generics during the exclusivity period is a possibility; and c) staggered post-exclusivity entry of generics could keep pricing healthy. We estimate Sun Pharma could clock revenue of $340-380 million if there are no authorised generics. We factor in $370mn in revenues and $230mn in earnings during the six-month exclusivity period. Further, we expect Ranbaxy synergies (which we estimate at $350mn in FY18F) to also drive growth. We factor in resolution at the Halol facility by mid-FY17F. We arrive at a 12-month target price of Rs 817/sh, based on SOTP valuation: a) Taro at Rs 147.1/sh, based on 14x Nov 2017 EPS of Rs 10.5; b) Gleevec exclusivity at Rs 6.3/sh; and c) base business at R664/sh, based on 23x Nov 2017 adjusted EPS (adjusted for gGleevec exclusivity, R&D spend on MK-3222, Taro earnings) of Rs 28.9. Our target price implies 8.2% upside from current levels, hence we upgrade to Neutral.
Our valuation multiple factors in growth beyond FY18F (after resolution at Halol and realisation of Ranbaxy synergies). Failure to scale speciality business presents a downside risk to long-term growth assumptions, hence valuation multiples.