Selling continues
The BSE Sensex, which slipped below the psychological 14,000 level in the opening session, extended the fall as selling continued. At 11:19 IST the BSE Sensex was down 176.76 points, at 13,844.56. It had opened firm, at 14,071.27, but started declining immediately after. The Sensex also registered a fresh low of 13,826.73.
The benchmark Sensex had sharply fallen 167 points on Thursday (22 February), in the last 45 minutes of trade, due to heavy unwinding of derivative contracts on account of their expiry.The total turnover on BSE amounted to Rs 1261 crore.The market-breadth, which reflects the overall health of the broader market, was very weak. A host of stocks from the smallcap and midcap space were being heavily sold. Against 1,932 shares declining on BSE, just 361 advanced. Only 37 scrips remained unchanged.
Real estate scrips renege
Fears of slowdown in housing demand due to rising cost of funds has dented real estate scrips, some of which are down between 2 - 5% today.
Unitech plunged 5% to Rs 382.10, Ansal Infrastructure lost 5% to Rs 566.20, Parsvnath Developers shed 4% to Rs 284.85, Sobha Developers was down 2.6% to Rs 777.85 and Mahindra Gesco Developers was down 2% to Rs 587.
Real estate scrips have been at the receiving end over the last few days. Shares of Ansal Properties & Infrastructure are down 34.7% from its recent peak of Rs 868 of 7 February 2007. Mahindra Gesco Developers has dropped 26.9% from a recent high of Rs 803.05 of 29 January 2007.
Parsvnath Developers is softer 29.4% from a recent high of Rs 403.60 of 2 February 2007. Sobha Developers has lost 24.5% from a recent high of Rs 1031.55 on 2 February 2007.
It may be recalled that real estate scrips had surged over the past two years, thanks to the housing sector boom due to easy availability of housing finance and relatively benign interest rates. The surge in real estate stocks was also because of the property boom, which has seen real estate prices increase manifold.
A number of banks have raised lending rates over the past few days following a hike in the cash reserve ratio (CRR) by the Reserve Bank of India on 13 February 2007. Earlier in January, the Reserve Bank of India (RBI) increased the risk weightage, and asked banks to make extra provisions for loans to commercial real estate projects, but exempted home loans from any such provisioning.
After making lending to the real estate sector difficult, the RBI has now placed restrictions on finance companies investing in real estate. On Thursday (22 February), the central bank came out with new norms for finance companies. The new norms state that no finance company, which is accepting public deposits, can invest more than 10% of its networth in land or property, except for its own use.
The demand for home loans has already slowed at a time when home loan rates are going up.
The Indian real estate sector has been booming since the last two years and prices have skyrocketed. The growth was driven by strong housing demand and growth in organised retailing.
Real estate firms reported a robust financial performance for the quarter ended December 2006. Unitech’s net profit jumped 3190% in December 2006 quarter to Rs 452.38 crore (Rs 13.75 crore). The net sales for the quarter rose 483.3% to Rs 1002.74 crore (Rs 171.91 crore).
Mahindra Gesco Developers has reported 277% surge in net profit in the December 2006 quarter, to Rs 9.50 crore (Rs 2.52 crore). Net sales for the quarter rose 34.2% to Rs 41.79 crore.
Prajay Engineers Syndicate reported 203.8% growth in net profit in the December 2006 quarter, to Rs 15.22 crore (Rs 5.01 crore). Net sales for the quarter rose 120.4% to Rs 42.08 crore (Rs 19.09 crore).
Anant Raj Industries reported 252.2% growth in net profit in the December 2006 quarter to Rs 42.30 crore (Rs 12.01 crore). Net sales for the quarter rose 290.1% to Rs 72.55 crore (Rs 18.60 crore).
Q4 growth buoys Wockhardt
Wockhardt rose 2.13% to Rs 338.95, after the company posted good Q4 December 2006 results.The counter clocked 40,874 shares on the BSE.
The Wockhardt scrip has been sliding since mid-November 2006. From Rs 425.50 on 14 November 2006, it dropped to Rs 328.95 by 21 December 2006, only to rise to Rs 366.05 by 19 January 2007. Here, the scrip slipped to Rs 330.95 by 22 February 2007
At the current market price of Rs 338.95, Wockhardt trades at 19.11 times its Q4 December 2006 annualized EPS of Rs 17.73.
Wockhardt’s consolidated net profit rose 19.5% in the December 2006 quarter to Rs 87.10 crore from Rs 72.90 crore in the December 2005 quarter. Total income surged to Rs 534.20 crore (Rs 368.90 crore).
Following an appeal from the chemicals and fertiliser ministry to reduce the prices of key drugs in public interest, Wockhardt has cut the price of anti-diabetic drug, Mopaday tablet 15 mg and 30 mg, anti-allergy drug practin tablet 4 mg and antidepressant lybotryp tablet 12.5 mg.
As per recent reports, Wockhardt plans to double the number of its hospitals from 7 to 14 by 2008. This will increase the cumulative capacity of these hospitals from 1,500 beds to about 3,000 beds. We are setting up new hospitals in Rajkot, Surat, Nasik, Nagpur, Bhopal. We will also commission two 350-bed hospitals in Kolkata and South Mumbai by the end of next year.
Wockhardt has announced that it will invest about Rs 400-500 crore for its expansion in the next 3-4 years, both through organic as well as the inorganic route. The doubling of capacity will, however, be done through the greenfield route only.
As per reports, the Maharashtra State Food and Drug Administration has cancelled the product licence of Wosulin 50:50, a human recombinant insulin manufactured by Wockhardt, for a combination flaw. The FDA had noted that Wosulin 50:50 contained 100% clear solution, instead of 50% clear solution and 50% suspension. The action was taken based on various complaints, in November 2006. The company also withdrew certain batches from the market following Maharashtra FDA orders.
In January 2007, Wockhardt had signed an in-licensing agreement with Crawford Healthcare, UK, to market Viticolor, a skin camouflage gel for topical application for vitiligo (leucoderma). Vitiligo is a skin disorder that affects 3 - 4% of the Indian population. Viticolor will be launched this year.
In October 2006, Wockhardt had acquired Ireland's Pinewood Laboratories for $150 million, to enhance its presence in Europe. It added that the United Kingdom accounts for half of Pinewood's $70 million sales. And in July 2006, Wockhardt had acquired Dumex India from Royal Numico. Dumex has two leading brands, Protinex and Farex, in the nutrition segment with revenues of Rs 60 crore. Besides these, Dumex will also provide technical assistance to Wockhardt for manufacturing two specialised sugar-free infant foods.
Further that month, Wockhardt had signed a memorandum with the Maharashtra Industrial Development Corporation (MIDC) to establish a special economic zone (SEZ) in Aurangabad. The SEZ will consist of a pharmaceutical and biopharmaceutical manufacturing and research facility spread over 107 hectares.
Wockhardt derives a large part of its revenue from exports. Currently, the US and European Union contribute to half of Wockhardt’s sales.
The benchmark Sensex had sharply fallen 167 points on Thursday (22 February), in the last 45 minutes of trade, due to heavy unwinding of derivative contracts on account of their expiry.The total turnover on BSE amounted to Rs 1261 crore.The market-breadth, which reflects the overall health of the broader market, was very weak. A host of stocks from the smallcap and midcap space were being heavily sold. Against 1,932 shares declining on BSE, just 361 advanced. Only 37 scrips remained unchanged.
Real estate scrips renege
Fears of slowdown in housing demand due to rising cost of funds has dented real estate scrips, some of which are down between 2 - 5% today.
Unitech plunged 5% to Rs 382.10, Ansal Infrastructure lost 5% to Rs 566.20, Parsvnath Developers shed 4% to Rs 284.85, Sobha Developers was down 2.6% to Rs 777.85 and Mahindra Gesco Developers was down 2% to Rs 587.
Real estate scrips have been at the receiving end over the last few days. Shares of Ansal Properties & Infrastructure are down 34.7% from its recent peak of Rs 868 of 7 February 2007. Mahindra Gesco Developers has dropped 26.9% from a recent high of Rs 803.05 of 29 January 2007.
Parsvnath Developers is softer 29.4% from a recent high of Rs 403.60 of 2 February 2007. Sobha Developers has lost 24.5% from a recent high of Rs 1031.55 on 2 February 2007.
It may be recalled that real estate scrips had surged over the past two years, thanks to the housing sector boom due to easy availability of housing finance and relatively benign interest rates. The surge in real estate stocks was also because of the property boom, which has seen real estate prices increase manifold.
A number of banks have raised lending rates over the past few days following a hike in the cash reserve ratio (CRR) by the Reserve Bank of India on 13 February 2007. Earlier in January, the Reserve Bank of India (RBI) increased the risk weightage, and asked banks to make extra provisions for loans to commercial real estate projects, but exempted home loans from any such provisioning.
After making lending to the real estate sector difficult, the RBI has now placed restrictions on finance companies investing in real estate. On Thursday (22 February), the central bank came out with new norms for finance companies. The new norms state that no finance company, which is accepting public deposits, can invest more than 10% of its networth in land or property, except for its own use.
The demand for home loans has already slowed at a time when home loan rates are going up.
The Indian real estate sector has been booming since the last two years and prices have skyrocketed. The growth was driven by strong housing demand and growth in organised retailing.
Real estate firms reported a robust financial performance for the quarter ended December 2006. Unitech’s net profit jumped 3190% in December 2006 quarter to Rs 452.38 crore (Rs 13.75 crore). The net sales for the quarter rose 483.3% to Rs 1002.74 crore (Rs 171.91 crore).
Mahindra Gesco Developers has reported 277% surge in net profit in the December 2006 quarter, to Rs 9.50 crore (Rs 2.52 crore). Net sales for the quarter rose 34.2% to Rs 41.79 crore.
Prajay Engineers Syndicate reported 203.8% growth in net profit in the December 2006 quarter, to Rs 15.22 crore (Rs 5.01 crore). Net sales for the quarter rose 120.4% to Rs 42.08 crore (Rs 19.09 crore).
Anant Raj Industries reported 252.2% growth in net profit in the December 2006 quarter to Rs 42.30 crore (Rs 12.01 crore). Net sales for the quarter rose 290.1% to Rs 72.55 crore (Rs 18.60 crore).
Q4 growth buoys Wockhardt
Wockhardt rose 2.13% to Rs 338.95, after the company posted good Q4 December 2006 results.The counter clocked 40,874 shares on the BSE.
The Wockhardt scrip has been sliding since mid-November 2006. From Rs 425.50 on 14 November 2006, it dropped to Rs 328.95 by 21 December 2006, only to rise to Rs 366.05 by 19 January 2007. Here, the scrip slipped to Rs 330.95 by 22 February 2007
At the current market price of Rs 338.95, Wockhardt trades at 19.11 times its Q4 December 2006 annualized EPS of Rs 17.73.
Wockhardt’s consolidated net profit rose 19.5% in the December 2006 quarter to Rs 87.10 crore from Rs 72.90 crore in the December 2005 quarter. Total income surged to Rs 534.20 crore (Rs 368.90 crore).
Following an appeal from the chemicals and fertiliser ministry to reduce the prices of key drugs in public interest, Wockhardt has cut the price of anti-diabetic drug, Mopaday tablet 15 mg and 30 mg, anti-allergy drug practin tablet 4 mg and antidepressant lybotryp tablet 12.5 mg.
As per recent reports, Wockhardt plans to double the number of its hospitals from 7 to 14 by 2008. This will increase the cumulative capacity of these hospitals from 1,500 beds to about 3,000 beds. We are setting up new hospitals in Rajkot, Surat, Nasik, Nagpur, Bhopal. We will also commission two 350-bed hospitals in Kolkata and South Mumbai by the end of next year.
Wockhardt has announced that it will invest about Rs 400-500 crore for its expansion in the next 3-4 years, both through organic as well as the inorganic route. The doubling of capacity will, however, be done through the greenfield route only.
As per reports, the Maharashtra State Food and Drug Administration has cancelled the product licence of Wosulin 50:50, a human recombinant insulin manufactured by Wockhardt, for a combination flaw. The FDA had noted that Wosulin 50:50 contained 100% clear solution, instead of 50% clear solution and 50% suspension. The action was taken based on various complaints, in November 2006. The company also withdrew certain batches from the market following Maharashtra FDA orders.
In January 2007, Wockhardt had signed an in-licensing agreement with Crawford Healthcare, UK, to market Viticolor, a skin camouflage gel for topical application for vitiligo (leucoderma). Vitiligo is a skin disorder that affects 3 - 4% of the Indian population. Viticolor will be launched this year.
In October 2006, Wockhardt had acquired Ireland's Pinewood Laboratories for $150 million, to enhance its presence in Europe. It added that the United Kingdom accounts for half of Pinewood's $70 million sales. And in July 2006, Wockhardt had acquired Dumex India from Royal Numico. Dumex has two leading brands, Protinex and Farex, in the nutrition segment with revenues of Rs 60 crore. Besides these, Dumex will also provide technical assistance to Wockhardt for manufacturing two specialised sugar-free infant foods.
Further that month, Wockhardt had signed a memorandum with the Maharashtra Industrial Development Corporation (MIDC) to establish a special economic zone (SEZ) in Aurangabad. The SEZ will consist of a pharmaceutical and biopharmaceutical manufacturing and research facility spread over 107 hectares.
Wockhardt derives a large part of its revenue from exports. Currently, the US and European Union contribute to half of Wockhardt’s sales.
posted by SY at 1:40 PM
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