Dear Reader: I'd like to extend to you my warmest wishes on behalf of the entire Equitymaster family. May the special occasion of Deepawali fill you with happiness and prosperity! And May you have A Wonderful New Year too! - Rahul
Indian equity markets traded in the green throughout the trading session today. The indices began the day's proceedings on a cautious note, however, and although they traded in the positive, it remained largely rangebound. The afternoon session witnessed buying activity intensify enabling the indices to notch further gains. This momentum continued in the final trading hours too, ensuring that the indices closed well above the dotted line. While the Sensex today closed higher by 131 points, the NSE-Nifty today closed higher by 43 points. The BSE Mid Cap and the BSE Small Cap also notched gains of 0.4% each. Gains were largely seen in banking and FMCG stocks.
As regards global markets, Asian indices closed mixed today while European indices have also opened on a mixed note. The rupee was trading at Rs 55.14 to the dollar at the time of writing.
Auto stocks closed mixed today. While Mahindra & Mahindra (M&M) and TVS Motors closed firm, Maruti Suzuki and Hero Motocorp closed in the red. As per a leading business daily, Maruti Suzuki is looking to capture market share of 45% as well as sell around 1.8 m cars each year by FY16. It must be noted that the company in recent times has had to deal with labour strikes and riots at its plant in Manesar as a result of which production halted and sales were impacted. All of this led to the company losing market share which at present is at around 40%. Further, the company is planning to set up a new manufacturing unit in Mehsana district of Gujarat with an annual capacity of 250,000 cars. The land acquisition for this has been completed and work is expected to begin in 2013. The company is also setting up five stockyards - one each at Bangalore, Nagpur, Ranchi and Siliguri. The site for the fifth one is yet to be chosen. In 1HFY13, Maruti saw a 1% YoY drop in the total vehicles sold although October 2012 was a strong month for the company on account of the festive season and production resuming at Manesar and gradually reaching full capacity. In addition to this, while there has been a surge in demand for the company's diesel cars, it is also focusing on pushing sales of petrol cars through various strategies.
Pharma stocks also closed mixed today. While Cipla and Sun Pharma found favour, Dr.Reddy's and Lupin were at the receiving end. As per a leading business daily, Lupin has launched the generic version of Tricor in the US. This drug belongs to Abbott Laboratories and is indicated for lowering cholesterol. Tricor tablets have annual sales of US$ 1.26 bn in the US. This launch is part of the company's strategy to focus on niche launches in the US. Indeed, one of the reasons why Lupin's business in the US has done well is on account of its focus on branded generics and niche launches which have lower competition and thus lesser price erosion. Besides Tricor, the oral contraceptive (OC) segment is one such niche area where Lupin intends to strengthen its presence. Till date, the company has launched 3 products in the OC segment and it expects sales to ramp up with new launches like Yasmin (market size US$ 150 m) and Seasonique (market size US$ 100 m) in the near future. Another focus area for Lupin remains launching drugs in the controlled release segment. Though till date the company has made only 2 launches, it has many more products lined up for approval.