Volatility strikes

The market is suffering from acute volatility, moving in and out of positive ground, on account of a mixed trend in pivotals. At 11:27 IST the BSE Sensex was up 12.30 points, at 14,526.14. The Sensex had also struck a fresh all-time high of 14,543.97 in intra-day trade. Earlier, the Sensex had opened lower, at 14,479.58, and slipped to 14,468.99 on heavy selling.

The total turnover on BSE amounted to Rs 2829 crore, boosted by three huge block deals of 23.14 lakh shares each in TCS, at an average Rs 1299.26 per share in opening trade. The counter was the top-traded on BSE with a turnover of Rs 906.96 crore. The TCS stock was down 0.85% to Rs 1293.90 on total volumes of 69.80 lakh shares.

The market-breadth was positive. For 1,474 shares advancing on BSE, 922 declined. Just 63 scrips remained unchanged.Among the 30-Sensex pack, 19 declined while the rest advanced.

Equity-dilution concerns dent RComm
Reliance Communications dropped 4% to Rs 492.75, partly due to profit-taking and partly due to concerns arising from equity dilution due to the large FCCB issue.As many 13.8 lakh shares changed hands in the counter on BSE.

The conversion premium is 30% over a reference share price of Rs 508.6378. The relatively lower-than-expected premium raised concerns that there could be early dilution of equity within one or two years. Reliance Communications (RCL) on Monday (5 February 2007) raised a huge $1 billion through a convertible bond issue.

RCL stock had surged 5% to a lifetime closing high of Rs 515.10 on Monday (5 February 2007) ahead of the news of an FCCB issue hitting the market after trading hours. The stock had spurted 18.4% in six trading sessions to Rs 515.10 by 5 February 2007 from Rs 434.95 on 24 January 2007, partly boosted by robust Q3 December 2006 results which were unveiled on 31 January 2007.

The proceeds from the issue will be utilised to part-finance the company’s $2.5 billion expansion programme. Last week, RCL Chairman, Anil Ambani, had announced a capital expenditure (capex)to expand coverage to 15,000-20,000 new towns. The capex was proposed to be funded through a mix of internal accruals and debt. In March 2006, Reliance Communications (RCL) had completed an FCCB issue to raise $500 million.

The company is going ahead with its expansion plans irrespective of the status of Hutch-Essar. RCL has expressed interest in buying 100% in Hutch-Essar. Vodafone and Hinduja group are also in the race for Hutch-Essar. With over 30 million subscribers, RCL is the second-largest telecom operator by subscriber numbers.

Reliance Communications also plans to roll out its Direct-to-Home (DTH) and IPTV services in the third quarter of the next financial year. Huge investments will be made in creating infrastructure to support these operations.

The company's Flag Telecom unit, which has received approval from the board, will be spending an additional $1.5 billion (about Rs 7,000 crore) on expanding and improving its undersea cable network. At present, Flag Telecom operates the world's largest private under-sea cable system, spanning 65,000 km, and a customer base of over 200 leading operators, which include the top-10 international carriers.

Recently, shareholders of Reliance Communications approved a scheme of arrangement by way of demerger of the existing wireless towers (CDMA and GSM) and related infrastructure of the company to its subsidiary, Reliance Telecom Infrastructure (RTIL). Under the scheme of transfer, more than 12,000 towers will be consolidated under RTIL.

RCL’s consolidated net profit jumped 198 % in Q3 December 2006 quarter to Rs 924.42 crore, on 26% growth in consolidated revenue to Rs 3755.30 crore.

Pyramid Saimira Theatre hits the roof on Malaysian JV
Cinema operator Pyramid Saimira Theatre climbed 5%, the maximum daily limit, to Rs 442.40, on plans to set up an equal joint venture for a chain of cinema halls in Malaysia.

The company has decided to tie-up with Asian Integrated Industries and to invest Rs 240 crore in the joint venture.The scrip clocked 4,902 shares on the BSE. There were pending buy orders for 2.84 lakh shares at the maximum price.

The newly-listed Pyramid Saimira Theatre (PTSL) was bullish since mid-January 2007. From Rs 190.15 on 19 January 2007, it jumped 121.58% to Rs 421.35 by 5 February 2007. Earlier, the scrip had slipped from Rs 189.95 on 10 January to Rs 190.15 by 19 January 2007.

The stock was valued 153.6% in less than a month of its listing at Rs 158.20 (closing price on BSE on the day of its debut) on 5 January 2007. The company had priced its IPO at the higher end of the Rs 88 - Rs 100 price-band.

At the current market price of Rs 442.40, Pyramid Saimira Theatre (PSTL) trades at 60.76 times its Q3 December 2006 annualized EPS of Rs 7.28.

UBS Securities had on 22 January 2007 purchased 2.2 lakh shares at Rs 211 on BSE in a block deal. On the same day, the foreign investor bought 2.3 lakh shares on NSE at Rs 211.55.

Recently, the PTSL’s board approved an arrangement with Ritual Developers, Bangalore, for constructing 15 malls, whereby Pyramid will establish and manage multiplexes in Karnataka.

The board has also approved the company's foray into northern and western (Chattisgarh, Uttar Pradesh, Madhya Pradesh, Maharashtra and Gujarat) India. The board of Pyramid Saimira Theatre (PSTL) has decided to explore inorganic growth opportunities in the core business – exhibition of movies.

PSTL is focussed on distribution and exhibition of films. The company had 194 screens under operational management as on 31 December 2006. PSTL's objective is to have presence in all categories of theatres including malls, multiplexes, cineplexes and standalones across the country in Tier I, II and III locations.

PSTL’s strategy is to distribute digital films simultaneously in a large number of cinema halls. This will bring in maximum revenues for the company.

The company reported a net profit of Rs 5.15 crore in the December 2006 quarter on total income of Rs 46.05 crore. For April-December 2006, the company reported a net profit of Rs 10.04 crore on revenue of Rs 98.58 crore.

Sensex strikes new all-time high

The BSE Sensex advanced sharply from the day’s low of 14,479.58, as buying resumed for index pivotals, striking a fresh all-time high of 14,533.94. At 10:14 IST the BSE Sensex was up 13.01 points, at 14,528.91.

The total turnover on BSE amounted to Rs 1554 crore, boosted by three huge block deals of 23.14 lakh shares each in TCS, at an average Rs 1299.26 per share in opening trade. The counter was the top-traded on BSE with a turnover of Rs 902.80 crore. The stock was down marginally by 0.01% to Rs 1304.95.

The market-breadth was positive. For 1,338 shares advancing on BSE, 535 declined. Just 48 scrips remained unchanged.Among the 30-Sensex pack, 20 advanced while the rest declined.

Reliance Communications (RCL) was the top loser, down 4.10% to Rs 494, on a volume of 7.23 lakh shares. As per reports, the company is battling Britain's Vodafone Group and other domestic firms in its bid to buy rival Hutchison Essar. RCL raised $1 billion through a convertible bond issue.

Sintex Ind extends gain on cost-cutting measures
Sintex Industries gained 1% to Rs 222 on NSE, after the company said on Monday it expects annual savings of Rs 14.40 crore from a new 18.9-Megawatt captive power plant.

As many as 4,247 shares changed hands in the counter on NSE. The stock rose 5.3% on Monday to Rs 219.60 ahead of the announcement, which hit the market after trading hours.The scrip has moved between Rs 205 - Rs 234 since mid-December 2006.

The captive power plant set up for Rs 45 crore will serve both its plastics and textile division, the company said in a statement on Monday.Sintex Industries had recently chalked out a Rs 410-crore expansion plan, which was to be implemented over four years, starting with the current fiscal. The company had planned to invest Rs 180 crore and Rs 230 crore in the in textile and plastics division, respectively.

The expansion in the textile division will be funded through borrowings under the Technology Upgradation Fund (TUF) scheme, while the ramping up of the plastic division will be funded through internal accruals.

Sintex has significant presence in men's shirting globally through joint ventures in Italy and the UK. Its expansion from 21 million metres to 24 million metres is aimed at entering the high-end women's shirting segment.

Sintex Industries announced in May that it will buy 74% in Zeppelin Mobile System India (ZMSI) for an undisclosed sum. ZMSI is engaged in designing and commissioning shelters of international standards. ZMSI also designs and commissions sophisticated polyurethane foam-based shelters, and structures for the telecom sector, mobile-hospitals, refrigerated bodies and other multi-purpose shelters.

Sintex Industries posted a 25% increase in profit-after-tax at Rs 25.46 crore (Rs 20.36 crore) for the quarter ended 31 December 2006. Net sales during the same period rose 30.67% to Rs 274.75 crore (Rs 210.26 crore).

Punjab Tractors elated on buzz of Tatas in queue for Actis' stake
Punjab Tractors gained 3.4% to Rs 288.90, amid reports that several auto cos were interested in bidding for private equity firm Actis’ 29% stake in the firm.

According to the report, Tatas also were considering to buy the private equity firm's holding in the north-India based tractor unit.As many as 62,913 shares changed hands in the counter on BSE.

Actis had given financial services firm, Citi, the mandate to call bids from potential buyers for its stake in Punjab Tractors (PTL). Other players who have evinced interest for Actis' stake include Mahindra & Mahindra, TAFE and Sonalika Tractors, reports suggest

Reports about Actis looking to exit PTL have also been doing the rounds for a while now. Yet, after remaining in a range, it was only on Monday, 5 February 2007, when the Punjab Tractors scrip spurted. It surged 12.5% that day to Rs 279.15. The stock moved between Rs 220 - Rs 254 from 20 November 2006 to 2 February 2007.

Another large shareholder, the Burman family, which runs consumer products maker Dabur India, is also considering selling its 14% stake in Punjab Tractors.

However, one newspaper quoted a Tata Motors' official as saying, "There is no such proposal before the board, and we cannot comment on reports that are speculative."

Punjab Tractors also holds a 14% stake in commercial vehicles maker Swaraj Mazda. Actis had acquired its stake from the Punjab government in mid-2003.In 2003, Actis paid $60 million for 29% stake in Punjab Tractors during a divestment programme.

The Burman family and Actis, who jointly hold around 43% stake, acting in concert successfully ousted PTL CEO Yash Mahajan from the company. Mahajan had a frosty relationship with Actis. They were also successful in getting Burman nominee PD Narang appointed as Chairman.

PTL, which has a dominant presence in North India, also holds 14% stake in commercial vehicles maker Swaraj Mazda. Earlier this year, the tractor company had appointed consulting firm, Accenture, to review the firm's strategy and organisational structure.

PTL’s net profit (adjusted for extra-ordinary items) declined 0.5% in the December 2006 quarter to Rs 20.70 crore. Net sales during the same period rose 2.3% to Rs 263.40 crore over the year ago period.

JSW Steel climbs as CER project gets UN-body clearance
JSW Steel rose 3.02% to Rs 468.45, after the company got a go-head to utilise the waste gases to generate power for internal consumption.As many as 35,801 shares were traded on the BSE.The scrip has been bullish since mid-December 2006. From Rs 312.90 on 12 December 2006, it surged 45.33% amid some depreciation en-route to Rs 454.75 by 5 February 2007. Earlier, the scrip had slipped from Rs 344.55 on 27 October 2006 to Rs 312.90 by 12 December 2006.

At the current market price of Rs 468.45, JSW Steel trades at 5.89 times its April - December 2006 annualized EPS of Rs 79.40.

JSW Steel has received clearance for using its gaseous waste to generate power. The proposal was approved by an executive body of the Clean Development Mechanism, United Nations Framework Convention of Climate Change. With this clearance, the company will utilise the waste gases emitted by JSW Steel’s Karnataka plant (7,500 tonnes per day) for generating power, which will be consumed for running its own operations. The project thus contemplates reduction of emission from both the steel and power plants.

Thus, over a period of 10 years, the plant can potentially reduce carbon emissions to the tune of 7.67 million CERs. Each CER stands for 1 tonne equivalent of carbon dioxide reduced, which can be traded globally.

At the current market price of Euro 15.5 per CER, the company stands to gain Euro 109 million over a 10-year period as carbon credit earnings. The company is expected to save on an average 0.77 million CERs per annum, which can be sold in the open market.

The company is now awaiting verification procedure to be completed by the authorities to check if emissions are as per the project design document approved by the executive body.

Recently, JSW Steel had registered crude steel production at 2.58 lakh tones in January 2007, a growth of 25% over January 2006 production. The HR plate production (0.17 lakh tonnes) showed a growth of 144% and the HR coil production (2.33 lakh tonnes) jumped 20%.

The strong growth in production is attributed to capacity enhancement carried out by the company during FY 2006-07. The production in the pellet plant and galvanising facilities in January 2007 was lower compared to January 2006.

Further, JSW Steel is expanding the capacity of its Bellary plant in Karnataka to 10 million tonnes per annum by 2010 from 3.6 million tonnes at present. For this, the company has earmarked Rs 5,000 crore. The Karnataka government has agreed to allot 4,000 acres to the company for expansion of the project.

The JSW group, part of the US $ 4 billion O P Jindal Group, is one of the lowest cost steel producers in the world. The group has diverse interests in mining, carbon steel, power, industrial gases and port facilities. The company primarily manufactures flat products such as H R coils, C R coils, galvanised products and auto grade / white goods grade CRCA steel.

Incorporated in 1994, JSW Steel has grown into a $ 1.6 billion company in little over a decade. The company has the largest galvanizing production capacity in the country, and is also the largest exporter of galvanized products with presence in over 74 countries across five continents.

The company has posted a net profit growth of 160% to Rs 362.15 crore in Q3 December 2006 compared with Rs 139.20 crore in Q3 December 2005. Net sales during the same period rose 51% to Rs 2301.50 crore from Rs 1522.45 crore in the year ago period.

Sensex hits 14,500; RComm spurts

The market held firm in mid-afternoon trade and the Sensex struck an all-time high above 14,500. Reliance Communications and HDFC surged. Auto shares were in demand, while index heavyweight Reliance Industries (RIL) had firmed up.

At 14:36 IST the Sensex was up 87 points, at 14,489. It rose as many as 107.06 points, to 14,510.83, at 14:30 IST. This is a new all-time high for the barometer index. The benchmark index surpassed its earlier all-time high of 14,462.77 of Friday (2 February 2007).

The market-breadth was strong. For 1,539 shares rising on BSE, 1082 declined. As many as 73 shares were unchanged.The BSE clocked a turnover of Rs 3649 crore.Auto shares rose on renewed buying. Hero Honda gained 2% to Rs 732, Bajaj Auto gained 1.5% to Rs 2820, car major Maruti Udyog rose 1.6% to Rs 960 while Tata Motors gained 0.1% to Rs 911.60.

Reliance Communications surged 5.6% to Rs 518. The scrip hit a lifetime high of Rs 518.40. Bharti Airtel was up 1.9% to Rs 786, off an all-time high of Rs 797 struck earlier during the day.

Mobile service majors were buoyant since Friday, after the Telecom Regulatory Authority of India (TRAI) decided to lower port charges, allowing cellular operators to connect to BSNL and MTNL lines by up to 29%, a move which is expected to result in tariff cuts. A race for India's fourth-largest mobile firm, Hutchison Essar, is also expected to boost the valuation of telecom stocks. Suitors for Hutch also include Britain's Vodafone.

Sumeet Ind leaps on plan to develop industrial park
Yarn maker Sumeet Industries surged 4.83% to Rs 24.95, after its board decided on a joint venture to develop an industrial park in Gujarat.

The board approved a proposal for buying 200 acres of land near Kandla Port, Gujarat. This plot is adjacent to an expanse of 55 acres already owned by Sumeet Industries. The company has decided to tie-up with Vishvas Infrastructure for the industrial park.

The counter clocked 5.43 lakh shares on the BSE. There were pending buy orders for 6.63 lakh shares at the maximum price.At the current market price of Rs 24.95, Sumeet Industries trades 5.74 times its Q3 December 2006 annualized EPS of Rs 4.34.

Sumeet Industries’ board meets on 5 January 2007, Sumeet Industries had decided to enter into the infrastructure and real estate businesses. The board also approved the sale, purchase and manufacture of menthol-related products.

Sumeet Industries has planned to close its only subsidiary at Nepal due to high political and labour disturbance. In this connection, the company sold off its plant and machinery during the year, and the winding up process is currently in progress, and should be completed in the current financial year.

Sumeet Industries is into textiles and its products include polypropylene filament yarn, and grey cloth. Its plant at Surat, in Gujarat, has an installed capacity of 2,000 tpa of polypropylene multi-filament yarn in technical collaboration with Neumunstersche Maschinen Und Anlagenbau (Neumag), Germany.

Sumeet Industries posted a net profit growth of 1.70% to Rs 0.60 crore (Rs 0.59 crore) in Q3 December 2006. Net sales rose 42.1% to Rs 27.55 crore (Rs 19.39 crore).

Enormous volumes place IFCI at 52-week high
IFCI jumped 19.24% to touch a 52-week high of Rs 29.75 on a huge volume of 3.77 crore shares on BSE.The scrip was range-bound since late-January 2007. From 22 January to 2 February, the stock fluctuated between Rs 23 and Rs 25. Earlier, the stock surged from a low of Rs 11.01 on 22 December 2006, to Rs 26.51 by 19 January 2007.

At the current price of Rs 29.75, IFCI trades 3.67 times its Q3 December 2006 annualized EPS of Rs 8.10.The rally in IFCI began after it sold 7% stake in NSE out of an aggregate 12.44% it holds in India's premier stock exchange. The company raked in about $161 million from the stake sale. The company still has another 5% stock in NSE, which it has kept in the larder for rainy days.

Fortunately for IFCI, all its investments in the past were in land intensive sectors like power and steel. The land sale of Malvika Steel, at Sultanpur, will also rake in the moolah for the company.

IFCI has 21.6% stake in ICRA, a rating agency floated in 1991, and plans to sell its holding through an offer for sale.

IFCI was the first development financial institution in the country, established in 1948 to cater to the financial needs of the industrial sector. As its cheaper line of credit began to dry up, the institution had to resort to expensive funding aggravating the situation.

IFCI had the rare distinction of posting a loss of Rs 3,230 crore on a turnover of Rs 1,109 crore in the year 2003-04. Losses dipped to Rs 324 crore in 2004-05 and further to Rs 74 crore in 2005-06.

In the June 2006 quarter this fiscal, IFCI posted a loss of Rs 15.60 crore but turned the corner in September 2006 with a profit of Rs 116 crore. But this was largely technical, as it has not been paying interest on its borrowings.

While in the December 2006 quarter, IFCI has posted a net profit of Rs 129.37 crore compared with a net loss of Rs 17.37 crore in Q3 December 2005. Operating income during the same quarter rose to Rs 367.54 crore from Rs 279.91 crore in the year ago quarter.

Federal-Mogul Goetze India eases
Federal-Mogul Goetze India shed 3.73%, to Rs 360, despite ABN Amro Bank acquiring an additional 2.53% stake, taking its holding in the company to 5.18%.The stock has been thinly traded on BSE with a volume of just 3,692 shares since morning.The scrip hit its near-term bottom of Rs 332.75 on 20 November 2006. Since then, it has appreciated to the current levels.

Federal-Mogul Goetze (India) is yet to come out with December 2006 quarter results. The company in its September quarter had reported a bottom line growth of 84.4% at Rs 12.32 crore over the corresponding previous year quarter. The sales for the same quarter stood at Rs 163.85 crore, up 19.1% over the year ago quarter.

Federal-Mogul Geotze (India) is involved in the manufacture of auto components like pistons, piston rings, sintered parts and cylinder liners covering a wide range of applications including two/three-wheelers, cars, SUVs, tractors, light commercial vehicles, heavy commercial vehicles, stationary engines and high output locomotive diesel engines. The company has its production facilities at Bangalore, Patiala and Bhiwadi.

In January 2007, Federal-Mogul Geotze (India) announced revising the size of its rights issue from the earlier announced Rs 100 crore to Rs 115 crore. Information on the company’s plans for utilization of these funds is not available.

Sensex strikes fresh all-time high as auto cos recover

The market firmed up further and the Sensex struck a new high in early-afternoon trade. Auto shares recovered from the lower level. Telecom stocks held firm. Select media shares had spurted, while metal scrips remained weak.

Select side-counters surged. Side-counter Yuken India (up 20% to Rs 175.90), Rama Paper (up 20% to Rs 42.10), Mazda (up 18% to Rs 197), Shree Ashtavinayak Cine Vision (up 17% to Rs 362.90), UTV Software (up 14% to Rs 327) and KG Denim (up 23% to Rs 23.40) surged.

At 12:27 IST the Sensex was up 91 points, at 14,494. It rose as many as 94.08 points, to a high of 14,497.85, surpassing its previous all- time high of 14,467.19 struck at 10:15 IST.

The market-breadth was strong. For 1,577 shares rising on BSE, 951 declined. Just 62 shares were unchanged. Gainers outpaced losers by a ratio of 1.65:1.The BSE clocked a turnover of Rs 2296 crore.

Jain Irrigation soars as Citigroup hikes stake
Jain Irrigation was trading up by 5.67%, at Rs 423, after announcing that Citigroup had acquired nearly 2.29% stake in the company.As many as 48,165 shares changed hands in the counter on BSE.

Citigroup Global Markets (Mauritius) already held 3.54% in Jain Irrigation, and was now pursuing additional shares. Citigroup's holding now stands at 5.83%. The date of acquisition of additional shares was 31 January 2007.

The stock has been rising consistently since hitting an intra-day low of Rs 302 on 17 November 2006, to the current levels.

Jain Irrigation manufactures drip and sprinkler irrigation systems and components, PVC, polyethylene (HDPE, MDPE) & polypropylene piping systems, plastic sheets (PVC & PC sheets), dehydrated onions and vegetables, processed fruits, tissue culture, hybrid & grafted plants, greenhouses, poly and shade houses, bio-fertilizers, solar water heating systems and solar photovoltaic (Solar lighting systems). The company is the largest producer of plastic pipes in India, and annually processes one-lakh metric tonnes of different polymers in India.

Jain Irrigation came out with a good set of December 2006 quarter numbers, reporting 105.2% growth in net profit to Rs 31.30 crore over the corresponding previous year quarter. Net sales in the same quarter grew 37.8% to Rs 302.31 crore over the previous year's quarter.

In November 2006, Jain Irrigation picked up 65% stake in US-based Cascade Specialities, thereby gaining entry into the world’s biggest onion dehydration markets. Jain Irrigation, after acquisition, is now the third-largest dehydrated onion producer in the world with a total combined capacity in excess of 25,000 mt.

Merck's generics business on radar, Dr Reddy’s Labs rises
Dr Reddy’s gained 0.65% to Rs 750, on reports that it may join the race for Merck’s generic business.“Merck’s generic business is such a big asset and we cannot ignore it, if it is up for sale. We neither confirm our interest nor deny it,” a Dr Reddy’s spokesperson said.

The acquisition is likely to be valued over $ 5 billion. Recently, other pharma companies, Ranbaxy and Cipla, have already disclosed their interests in acquiring the company in partnership with private equity funds.

Merck’s generics business had sales of $2.35 billion last year, with leadership position in countries such as Australia, France and Scandinavia. The company also has subsidiaries in UK, Spain, Sweden and Belgium.

Merck’s Generics has major operations and facilities in Australia, Belgium, Canada, Germany, Italy, Netherlands, South Africa, Spain, UK, Sweden and USA. It is currently ranked among the top-ten global suppliers in the generics market, and has a wide-range of more than 400 products in all therapeutic areas.

The counter clocked 33,456 shares on BSE. It had slipped a bit from an intra-day high of Rs 754.50.

The stock declined sharply in the past few sessions, just after it announced its December quarter results. From Rs 815.95 on 17 January, the stock declined consistently to Rs 745.15 on 2 February 2007, on sustained selling.

Dr Reddy’s reported a surge in net profit in the 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 the December 2005 quarter. Total revenue jumped to Rs 1540 crore from Rs 590 crore.

Dr Reddy'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. Analysts were expecting an even better performance from the company.

Revenues from core business, excluding contribution from authorised generics and acquisitions, increased by 38% to Rs 820 crore (Rs 590 crore). The API business revenues for the December 2006 quarter increased by 29% to Rs 270 crore from Rs 210 crore in the corresponding previous quarter. Similarly, revenues from the branded formulations business increased 18% at Rs 320 crore from Rs 270 crore in the corresponding quarter last year, mainly driven by growth in India and Russia. Revenues from the custom pharmaceuticals services business was up at Rs 156.9 crore from just Rs 10.1 crore in the corresponding quarter last year.

The 180-day marketing exclusivity for Ondansetron, the generic version of Zofran tablets, during the December 2006 quarter, which the company has launched also helped Dr Reddy's to capture 55% marketshare, adding Rs 22.3 crore to the third quarter under review. Ondansetron is the second drug gaining marketing exclusivity, after Fluextine substantially bolstered the company's revenues in 2001.

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.

M&M riding on healthy January sales
Mahindra & Mahindra rose 1.88% to Rs 930, after reporting a 26% rise in January sales, to 19,875 units, compared to sales in the year ago period.

Mahindra & Mahindra (M&M) said domestic auto sales, including utility vehicles, light commercial vehicles and three-wheelers, rose 24% to 19,132 units from 15,472 units a year earlier. Exports more than doubled to 743 units from 351 units. Mahindra sold 8,668 tractors, up 13% from 7,658 sold a year earlier. Scorpio January sales stand at 4,190 units versus 3,306 units.

Recently, M&M hiked the price of sport utility vehicle (SUV) Scorpio by Rs 3,000 - Rs 13,000, while that of its utility vehicle (UV) Bolero by Rs 5,600 - Rs 6,500, beginning last week of January. According to Rajesh Jejurikar, Executive Vice President, Sales and Marketing, the price revision was necessitated by increasing input costs, as well as other inflationary strain.

As many as 1.13 lakh shares changed hands in the counter on BSE.The stock steadily rallied in the past few trading sessions, advancing from Rs 874.30 on 10 January to Rs 985.30 by 16 January 2007, on sustained buying. The scrip also surged to a life high of Rs 1002, on the same day. Here, the scrip began correcting till Rs 900.20 on 31 January 2007. The scrip again headed upwards from Rs 912.85 on 2 February, as buying resumed.

In January, M&M decided to invest Rs 2500 crore in a new plant for its joint venture with Navistar International Corp. The company has signed an agreement with the Maharashtra Government for the plant. Initially, the facility will have a capacity of 2,50,000 units and the production will begin in two years. Mahindra holds 51% stake in a joint venture with truck maker Navistar International to make light, medium and heavy trucks and buses.

In late-2006, M&M formed a joint venture with French car maker, Renault, to make 5 lakh cars a year in India. The plant will have equal equity participation. M&M's another existing 51:49 venture agreement with Renault, over a year old, envisages the manufacture of the Renault Logan, in which Euros 125 million have already been invested.

Mahindra & Mahindra is also readying itself to foray into North America, the world's largest market for sports utility vehicles (SUV) and pick-ups, with its flagship Scorpio, and a pick-up based on the same platform. In September, the company signed a distribution agreement with Global Vehicles, US, for distribution of M&M vehicles and accessories in the world's largest economy. M&M will be the first Indian automaker to enter the highly-competitive American passenger vehicle market.

The company posted 21% rise in net profit to Rs 242.12 crore for Q3 December 2006, compared to Rs 200.13 crore for Q3 September 2005. Total income increased 14% to Rs 2617.30 crore (Rs 2207.17 crore).

During the current quarter, CanvasM Technologies, CanvasM (Americas) Inc, JECO Holding AG. Gesenkschmiede Schneider GmbH, JECO - Jellinghaus GmbH, Falkanroth Umformtechnik GmbH, Falkenroth Grundstucksgesellschaft GmbH, Mahindra Forgings Mauritius, Mahindra Forgings Global have become subsidiaries of the company.

During the quarter, consequent to a successful institutional placement of shares by Mahindra Gesco Developers (MCDL), the direct and indirect ownership of M&M in MGDL was reduced to less than half of the voting power in the latter. As a result MGDL and its subsidiaries, Mahindra Infrastructure Developers, Mahindra World City Developers, Mahindra World City (Jaipur), Mahindra World City (Maharashtra) and Mahindra Integrated Township (formerly known as Mahindra Integrated Township), ceased to be subsidiaries and have become associates of M&M instead.