Wednesday, August 24, 2005

Glenmark Pharma in demand


Glenmark Pharma put on 2.1% to Rs 284, after the company's announcement that
its GRC 3886 molecule has obtained US FDA sanction for conducting further
clinical trials in the US.
60,912 shares changed hands in the counter on BSE in an hour-and-a-half of
trade.
The stock jumped 3.77% on Wednesday (24 August 2005) to Rs 278 ahead of the
announcement.
Earlier, a major correction pulled the stock sharply off the higher level
since late July 2005. From a high of Rs 311.80 on 25 July 2005, the stock
had tumbled to Rs 267.90 by 23 August 2005.
Following the US FDA nod for further clinical trials of the GRC 3886
molecule, Glenmark is on course to receive $ 30 million in milestone payment
before the end of this fiscal. The molecule is on course to enter Phase II
clinical trials by early 2006 in the US. Forest Corporation, Glenmark's
development and marketing partner for the drug in the territory of North
America will conduct clinical trials in the US.
Glanmark has already received $ 10 million from Forest as an upfront payment
last year and a further $ 10 million on completion of phase I trials in
March 2005. The total value of the deal is $ 110 million.
Glenmark Pharma’s key focus includes dermatology, gynecology, respiratory,
gastrointestinals and lifestyle diseases like diabetes and cardiology. The
drug maker's domestic business contributes to a majority of the revenues.

Major expansion plan provides strength to Tata Steel


Steel major Tata Steel rose 1.5% to Rs 381.50 after the company’s board
approved setting up a large integrated greenfield plant at Jharkhand.
3 lakh shares changed hands in the counter on BSE
After a rally in the stock during early July 2005 to mid-August 2005, the
stock witnessed a major correction later. From a recent peak of Rs 414.10 on
17 August 2005, it tumbled to Rs 375.80 by 24 August 2005.
Earlier, the scrip spurted 21.7% in a short while to Rs 414.10 by 17 August
2005 from a low of Rs 340.10 on 30 June 2005.
Tata Steel’s proposed steel plant will have an initial capacity of five
million tonnes per annum, to be completed in four years, which will be
extended to a capacity of 10 million tonnes per annum in the subsequent five
years. The capital cost would be about Rs 15,000 crore to Rs 20,000 crore in
the first phase and Rs 30,000 crore to Rs 35,000 crore on completion of the
second phase.
Tata Steel’s production jumped 18% in July 2005 to 4.13 lakh tonnes, after
an expanded facility became operational. The steel major expects to maintain
the rising trend in production in the coming months, as the 1-million-tonne
expansion, completed early this year, came into full production. The company
has placed an order for a new blast furnace to further expand the steel
making capacity at its Jamshedpur plant by another 2 million tonnes a year,
taking the total to 7.4 million tonnes.
Tata Steel had cut steel prices in July, joining rivals such as Mittal Steel
Co. and South Korea's Posco. Tisco lowered prices by Rs 3,000 a metric tonne
on 1 July.
The company’s profit before tax and extraordinary items rose 16% in Q1 June
2005 to Rs 1,413.75 crore. Sales grew 9% to Rs 3,464.52 crore. During the
quarter, Tisco’s steel margins were under pressure, as it had to cut steel
prices to reduce inventory build-up and counter cheaper imports.
Tata Steel contains costs by getting all its iron ore and two-thirds of its
coal from its own mines.

Mphasis BFL flops as Barings calls off stake sale


Mphasis BFL lost 3.5% in opening trade to Rs 242 after private equity firm
Barings Private Equity said it has given up a plan to sell its 35.6% stake
in the company.
28,521 shares changed hands in the counter on BSE by the first few minutes
of trade.
Mphasis BFL stock lost ground since mid-July 2005. From a recent high of Rs
285.10 on 19 July 2005, the stock had slipped to Rs 251 by 24 August 2005 on
the eve of the announcement.
Baring decision not to divest the stake was because it was not satisfied
with the bids received. It may be recalled that Barings had put on the block
its 35.6% stake in Mphasis in May 2005. Unconfirmed reports had it that
Hinduja TMT had bid aggressively valuing the firm at Rs 300 per share but
Barings decided not to accept the Hinduja bid as the current management of
Mphasis was against it.
The cancellation of stake sale in Mpahsis will put pressure on Barings as
the fund which holds the Mphasis stake has already expired and it is on a
one-year extension which ends in December 2005.

Sensex inches up in opening trade


The market edged higher in early volatile trade. Market breadth was quite
strong as gainers outpaced losers by a ratio of 5:1.
Bhel, Bharti Tele-Ventures (BTL) and Ranbaxy moved up for the second day in
a row. But a fall in its ADR weighed on HDFC Bank. Index heavyweight
Reliance Industries (RIL) edged slightly higher.
Mphasis BFL slipped after Barings Private Equity – a private equity firm
said it has given up a plan to sell its 35.6% stake in the company.
At 10:17 IST, the 30-share BSE Sensex was up 16 points at 7,628. The S&P CNX
Nifty was up 4.40 points or 0.19% to 2,330.50
PSU power equipment major Bhel rose 2% to Rs 1,078.50.
Satyam Computer rose 0.9% to Rs 496.50, Ranbaxy gained 0.8% to Rs 518, Dr
Reddy’s Laboratories rose 0.6% to Rs 805, and BTL rose 0.4% to Rs 312.65.
Hero Honda gained 0.7% to Rs 655 on reports that the company will launch a
scooter model and one more motorcycle model in this financial year.
L&T gained 0.9% to Rs 1,292 after the company said on Wednesday it had
received an order worth more than Rs 211 crore to rebuild the Kensington
Oval in Barbados. The stadium is the venue for the World Cup cricket
tournament in 2007. The project will be completed in 16 months.
Steel major Tisco rose 0.7% to Rs 378 after its board approved setting up a
large integrated greenfield plant at Jharkhand. The proposed steel plant
will have an initial capacity of five million tonnes per annum to be
completed in four years, which will be extended to a capacity of 10 million
tonnes per annum in the subsequent five years.
RIL gained 0.3% to Rs 696.50 and Infosys gained 0.5% to Rs 2,279

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Dishman Pharmaceuticals gets energised by stock split proposal


Dishman Pharmaceuticals surged for the second day in a row after the company
said on Monday its board would consider a stock split.
The stock was up 4% on BSE in mid-afternoon trade at Rs 780. 3,568 shares
changed hands in the counter on BSE.
The stock jumped 7.2% on Tuesday (23 August 2005) to a lifetime closing high
of Rs 749.30 boosted by the announcement.
It staged a rebound from the lower level recently. From a recent low of Rs
620.65 on 1 August 2005, the stock rose 12.5% in a short while to Rs 698.45
by 22 August.
The stock witnessed a surge in the last one year in a firm market. From a
level of Rs 470 in early August 2004, the stock rose to Rs 698.45 by 19
August 2005.
Dishman Pharmaceuticals said on Monday its board will meet on 31 August 2005
to consider sub-division of equity shares of the company. The company also
announced that its 0.5% Unsecured Foreign Currency Convertible Bonds were
listed on the Singapore Stock Exchange on Monday.
Dishman focuses on contract manufacturing for pharma MNCs. The company
started with production of quats in 1989, forward integrated into bulk drug
intermediaries in 1996, and commenced contract manufacturing for Belgium’s
Solvay in 2002.
In July this year, Dishman entered into an agreement with a leading British
company NU SCAAN, for the development and manufacture of bulk actives for
neutraceutical products.
Dishman also announced the acquisition of the business (order book) together
with the technology basket pertaining to a group of specialty chemical
products from C6, a UK company, for an undisclosed sum in July 2005.

Titan Industries ends firm as board mulls rights issue


Titan Industries ended at Rs 485.15 on volumes of 7.67 lakh shares.
The counter touched a high of Rs 494.8 and low of Rs 445.55 in the today's
trade.
It more than doubled from the close of Rs 212.25 on 29 March 2005, to reach
a high of Rs 535.65 on 2 August 2005. The stock has been much pursued by
FIIs and mutual funds alike, following bright prospects for the company's
line of business.
At 15:00 IST, the counter was poised at Rs 453, when Titan Industries
announced that its board of directors would meet on 31 August 2005 to
consider and approve a rights issue of equity shares and / or an issue of
debt instruments.
Titan Industries is the only player in organised retailing in jewellery with
a pan-India network and excellent brand equity (Tanishq). Titan entered into
the precious jewellery segment in 1995 under the brand name `Tanishq'.
Tanishq commands almost 70% share in the branded jewellery market. Tanishq
jewellery is exported to Europe, the US, the Middle East and Australia.
Titan is also a leading manufacturer of watches, which it markets under the
Titan and Sonata brand names. It enjoys a 25% share of the total domestic
watches market.
The company is expanding its watches capacity to 11 million units over the
next year from the current 9 million units. The company will spend up to Rs
10 crore in its expansion drive, which will cover the three units at Hosur,
Himachal Pradesh and Dehradun besides an outsourced facility.
For the quarter ended June 2005, the company reported turnaround results. It
posted a net profit of Rs 5.02 crore (net loss of Rs 5.78 crore). Net sales
increased 42.88% to Rs 286.21 crore (Rs 200.31 crore).

Market undergoes volatility amid mixed trends in pivotals


Intense volatility characterised trading on the bourses today on the eve of
the expiry of August 2005 derivatives contracts on Thursday (25 August
2005).
The market could not sustain higher levels, as Sensex slipped into negative
territory in early afternoon trade. In early trade, in fact, the Sensex had
proved firm.
However, after plunging as much as 70 points in mid-afternoon trade, the
Sensex staged a fight-back from lower level in the last half an hour or so
of trading. Stocks like ICICI Bank, Bhel, Reliance Industries, Bharti
Tele-Ventures (BTL) and HDFC Bank proved resurgent (from the lower levels).

A host of stocks like Mahindra & Mahindra, Siemens, SRF, Bombay Dyeing,
Punjab National Bank (PNB), NIIT, Financial Technologies, Amforge
Industries, Bharat Bijlee, Dabur, and Marico figured on the comeback trail.
Cement, steel, sugar stocks and IT pivotals , however, were hurt by profit
taking.
Market breadth was quite weak as a host of side counters dipped on profit
taking. There were 1,797 losers on BSE as compared to 809 gainers. 42 stocks
were unchanged.
Construction stocks were also among the gainers.
Titan Industries found its footing at the fag end of the trading session
after the company said it would make a rights issue.
The Sensex lost 3.99 points to 7,612.00. The S&P CNX Nifty inched down 3.60
points or 0.15% to 2,322.50
The Sensex swung 102 points for the day, between a low of 7,537.50 and high
of 7,639.68.
BSE clocked a turnover of Rs 2,876 crore – lower than Tuesday’s Rs 2,977
crore.
PSU power equipment major Bhel emerged stronger, by 3.7% to Rs 1,074. Short
covering in the F&O segment boosted the counter. 61,082 shares changed hands
in the stock on BSE.
Cellular services major Bharti Tele-Ventures advanced 2.5% to Rs 311.35. 2.1
lakh shares were traded in the counter on BSE.
ICICI Bank added on 1.9% to Rs 488.10. 1.7 lakh shares changed hands in the
counter on BSE.
Index heavyweight Reliance Industries put on 1.3% to Rs 694.55. 28.2 lakh
shares changed hands in the counter on BSE.
Reliance Energy (up 1.5% to Rs 575.90) firmed up on a report that said it
had submitted bids for Rs 2,200 crore worth of highway projects. 1.2 lakh
shares changed hands in the counter on BSE.
HDFC Bank clawed back from the lower level. The stock was up 0.2% to Rs
648.50. The stock came back from the day’s low of Rs 630. 1.9 lakh shares
were exchanged in the counter on BSE.
Hero Honda witnessed a sell-off. The stock slumped 4.5% to Rs 649. 71,562
shares changed hands in the counter on BSE
Cement stocks weakened. Gujarat Ambuja Cements (GACL) (down 1.1% to Rs
63.40) and ACC (down 1.2% to Rs 459) were in the slipstream. Cement stocks
had strengthened in the past few days on the back of firm cement prices.
Profit taking pulled steel scrips down - Tisco (down 1.9% to Rs 376) and
Sail (down 2.2% to Rs 59.80). Steel shares had proved strong in the past few
weeks on expectations that steel firms would raise prices by up to 7% in
September 2005.
Weakness in ADRs weighed on IT pivotals - Wipro (down 2% to Rs 351), Saytam
Computer (down 1.7% to Rs 491), Infosys (down 0.7% to Rs 2,269), and TCS
(down 0.8% to Rs 1,306).
Tractor and utility vehicle major Mahindra & Mahindra (up 0.7% to Rs 691),
Marico Industries (up 1.1% to Rs 281), PNB (up 0.9% to Rs 401), Bombay
Dyeing (up 2.9% to Rs 404) and SRF (up 1.8% to Rs 302.60) all moved higher.

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