Indian indices, after opening the day in the positive, slipped into the red on sell off in heavy weights over the previous two hours of trade. Stocks from realty and capital goods space are trading weak while stocks from the banking and oil & gas space are trading firm.
The BSE-Sensex is down by 62 points while NSE-Nifty is trading 19 points below the dotted line. BSE Midcap index is down by 0.5% while BSE Small cap index is trading 0.2% below yesterday's closing. The rupee is trading at 45.43 to the US dollar.
Pharma stocks are trading mixed with Fulford and GlaxoSmithKline Pharmaceuticals (GSK Pharma) trading firm while Aventis Pharma and Abbott India are trading weak. As per a leading financial daily, GSK Pharma is embarking on a two-pronged strategy of acquisitions and product launches to consolidate its position in India. As per the company's spokesperson, GSK Pharma is weighing potential acquisitions which will support its growth in India. Possible targets would include brands in segments such as cardiovascular, central nervous system, metabolic disorders, as well as domestic firms.
Apart from inorganic growth, GSK Pharma is looking to launch a range of products, including patented products and branded generics. As per a company spokesperson, the company would launch the pneumoccocal vaccine Synflorix, as well as two cancer productsó Revolade and Votrient this year. The company is also looking at launching some branded generic products in areas like antibiotics, metabolic diseases, cardiovascular ailments, etc. along with some skin care products from the Stiefel range. It may be noted that launching a mix of patented products and branded generics is a strategy which other MNC pharma players like Aventis, Abbott and Novartis are also pursuing in India. However, there is room for every player to garner sufficient share because the Indian market is growing at about 15% YoY per annum.
Food stocks are trading weak led by Wadala Commodities and United Spirits. Lakshmi Energy released its 1QFY11 results. The company's consolidated top-line increased by 3.5% YoY. Sales are higher primarily due to higher offtake in the agri business. The sales in the agri business grew by 16% YoY while the company did not operate its energy business resulting in no contribution from this segment to the company's top line. Operating income increased by 17.6% YoY. This was a result of fall in raw material and staff costs. While raw material costs fell by 2% YoY, staff costs fell by 26% YoY. Operating income would have been higher but for a sharp rise in other expenditure. Other expenditure increased by 20% YoY during the quarter. On a segmental basis, operating income of agri business increased by 43.5% YoY. Net profit of the company fell by 36.6% YoY. This was the result of a sharp increase in interest expense. Interest expense increased by 124% YoY during the quarter.