Market off-colour; loses nearly 45 points
The market opened weak because of heavy selling. At 10:25 IST the BSE Sensex was down 43.43 points, to 14,164.59. It had opened slightly higher, at 14,212.12, but began declining as selling emerged. The Sensex has stooped to a low of 14,119.79. However, it started recovering from this point.
Volatility may remain high on the bourses in the run up to the expiry of January 2007 derivatives contracts on Thursday (25 January 2007).The total turnover on BSE amounted to Rs 408 crore.The market-breadth was negative. For 904 shares declining, 838 advanced. Just 40 scrips remained unchanged.Among the 30-Sensex pack, 20 declined while the rest advanced.Cement major ACC was the top loser, down 3.89% to Rs 1072.35, on a volume of 62,390 shares.Gujarat Ambuja Cements (down 3.44% to Rs 141.70) and Grasim (down 2.20% to Rs 2831.10) were the other losers.
Dr Reddy’s Lab under pressure
After a positive opening, Dr Reddy’s Lab drifted lower even as the company reported 199.3% surge in net profit for December 2006 quarter.At 9:59 IST the stock was down 2% to Rs 793. It also rose as much as 1.2% in opening trade, up to Rs 820.40. A strong 20,402 shares changed hands in the counter on BSE.The stock had been range-bound since mid-December 2006, moving between Rs 775 and Rs 826.
After trading hours on Monday, Dr Reddy’s Lab reported a surge in net profit in December 2006 quarter. The Hyderabad-based firm, which acquired Germany's Betapharm last year, said quarterly net profit rose to Rs 188 crore from Rs 62.80 crore in December 2005 quarter. Total revenue jumped to Rs 1540 crore from Rs 590 crore. The company's foreign acquisitions and better sales of generics in the United States drove growth, while overseas sales were expected to rise as drugs with annual sales of $30 billion are likely to go off patent in the next two years. For generics, Dr. Reddy's Labs revenue rose to Rs 768 crore from Rs 83.10 crore.
Dr Reddy's Labs launched six products in the United States last year. The company hopes to profit from the US approval of four new drug applications during the December quarter, and is awaiting approval for 58 more.
The company expects revenue from Betapharm to contribute significantly to its earnings after two or three years, when it will shift manufacturing to India. Dr Reddy’s Lab acquired Betapharm, Germany, for better access to the European markets.
Import duty lifted, cement shares reel
Cement shares fell after the Centre did away with customs duty on ordinary portland cement.ACC dropped nearly 4% to Rs 1073, Grasim shed 2% to Rs 2831.50, Gujarat Ambuja Cements (GACL) dropped 2% to Rs 143.80 and India Cements lost 3% to Rs 234.30.A strong 1.4 lakh shares changed hands in ACC, 6 lakh shares changed hands in GACL and 6.8 lakh shares got traded in India Cements.
The customs duty on portland cement has been cut to zero from 12.5%. However, portland cement accounts for only 32% of the cement production in India. It is blended cement, which accounts for a majority of production in the country, and the customs duty on blended cement has not been tinkered with.
Analysts reckon that cement prices in only a few regions, mainly restricted to Bangladesh, and to some extent Sri Lanka, could be impacted due to increase in imports following the lifting of import duty. Cement being a bulky commodity with freight costs accounting for a large portion of its cost, prices in the interior regions are unlikely to be affected.
Cement scrips had firmed up in the past few days on expectations of strong December 2006 quarter results. From Rs 1019.65 on 10 January 2007, ACC rose to Rs 1115.80 by 22 January, Gujarat Ambuja Cements shot up to Rs 146.75 by 22 January 2007 from Rs 137.10 on 10 January 2007. Grasim had firmed up to Rs 2894.75 on 22 January from Rs 2786.05 on 10 January 2007.
Strong Q3 results expected from cement firms on the back of higher cement prices. Grasim unveils its Q3 results today.
The cement industry reported 8% y-o-y growth in despatches to 135.3 lakh tonnes in December 2006, compared to a solid 13% growth in November 2006. The slow down in the growth in December 2006 compared to November 2006, was largely due to a higher base in December 2005.
With a busy season likely to begin for the construction sector, cement prices have been forecast to go up in the coming months. However, about 75 million tonnes of capacity addition planned continues to be a major long-term risk for the industry.
Volatility may remain high on the bourses in the run up to the expiry of January 2007 derivatives contracts on Thursday (25 January 2007).The total turnover on BSE amounted to Rs 408 crore.The market-breadth was negative. For 904 shares declining, 838 advanced. Just 40 scrips remained unchanged.Among the 30-Sensex pack, 20 declined while the rest advanced.Cement major ACC was the top loser, down 3.89% to Rs 1072.35, on a volume of 62,390 shares.Gujarat Ambuja Cements (down 3.44% to Rs 141.70) and Grasim (down 2.20% to Rs 2831.10) were the other losers.
Dr Reddy’s Lab under pressure
After a positive opening, Dr Reddy’s Lab drifted lower even as the company reported 199.3% surge in net profit for December 2006 quarter.At 9:59 IST the stock was down 2% to Rs 793. It also rose as much as 1.2% in opening trade, up to Rs 820.40. A strong 20,402 shares changed hands in the counter on BSE.The stock had been range-bound since mid-December 2006, moving between Rs 775 and Rs 826.
After trading hours on Monday, Dr Reddy’s Lab reported a surge in net profit in December 2006 quarter. The Hyderabad-based firm, which acquired Germany's Betapharm last year, said quarterly net profit rose to Rs 188 crore from Rs 62.80 crore in December 2005 quarter. Total revenue jumped to Rs 1540 crore from Rs 590 crore. The company's foreign acquisitions and better sales of generics in the United States drove growth, while overseas sales were expected to rise as drugs with annual sales of $30 billion are likely to go off patent in the next two years. For generics, Dr. Reddy's Labs revenue rose to Rs 768 crore from Rs 83.10 crore.
Dr Reddy's Labs launched six products in the United States last year. The company hopes to profit from the US approval of four new drug applications during the December quarter, and is awaiting approval for 58 more.
The company expects revenue from Betapharm to contribute significantly to its earnings after two or three years, when it will shift manufacturing to India. Dr Reddy’s Lab acquired Betapharm, Germany, for better access to the European markets.
Import duty lifted, cement shares reel
Cement shares fell after the Centre did away with customs duty on ordinary portland cement.ACC dropped nearly 4% to Rs 1073, Grasim shed 2% to Rs 2831.50, Gujarat Ambuja Cements (GACL) dropped 2% to Rs 143.80 and India Cements lost 3% to Rs 234.30.A strong 1.4 lakh shares changed hands in ACC, 6 lakh shares changed hands in GACL and 6.8 lakh shares got traded in India Cements.
The customs duty on portland cement has been cut to zero from 12.5%. However, portland cement accounts for only 32% of the cement production in India. It is blended cement, which accounts for a majority of production in the country, and the customs duty on blended cement has not been tinkered with.
Analysts reckon that cement prices in only a few regions, mainly restricted to Bangladesh, and to some extent Sri Lanka, could be impacted due to increase in imports following the lifting of import duty. Cement being a bulky commodity with freight costs accounting for a large portion of its cost, prices in the interior regions are unlikely to be affected.
Cement scrips had firmed up in the past few days on expectations of strong December 2006 quarter results. From Rs 1019.65 on 10 January 2007, ACC rose to Rs 1115.80 by 22 January, Gujarat Ambuja Cements shot up to Rs 146.75 by 22 January 2007 from Rs 137.10 on 10 January 2007. Grasim had firmed up to Rs 2894.75 on 22 January from Rs 2786.05 on 10 January 2007.
Strong Q3 results expected from cement firms on the back of higher cement prices. Grasim unveils its Q3 results today.
The cement industry reported 8% y-o-y growth in despatches to 135.3 lakh tonnes in December 2006, compared to a solid 13% growth in November 2006. The slow down in the growth in December 2006 compared to November 2006, was largely due to a higher base in December 2005.
With a busy season likely to begin for the construction sector, cement prices have been forecast to go up in the coming months. However, about 75 million tonnes of capacity addition planned continues to be a major long-term risk for the industry.
posted by SY at 12:00 PM
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