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After trading on a positive note for most part of the day, buying activity intensified in the afternoon session leading the markets to close on a strong note. At the closing bell, the BSE Sensex closed higher by 275 points, the NSE Nifty finished higher by 92 points. The S&P BSE Midcap and the S&P BSE Small Cap finished higher by 0.7% and 0.6% respectively. Gains were largely seen in IT and metal stocks.
Asian markets finished mostly higher today after U.S. indices ended higher and oil prices hit their highest levels for this year. But a stronger yen continued to weigh on Japanese shares. The Shanghai Composite gained 1.73% and the Hang Seng rose 0.82%. The Nikkei 225 lost 1.25%. European markets are higher today with shares in France leading the region. The CAC 40 is up 0.52% while London's FTSE 100 is up 0.33% and Germany's DAX is up 0.22%.
Oil prices were trading at US$41.53 a barrel at the time of writing. The rupee was trading at 66.61 against the US$.
Hindustan Unilever Limited (HUL) has reportedly inked an agreement for the sale of its rice exports business to LT Foods Middle East DMCC for Rs 250 million. This primarily includes brands 'Gold Seal Indus Valley' and 'Rozana'. The brands registered a turnover of Rs 510 million in 2014-15. The company's decision to divest is in line with its strategy to exit non-core businesses, while continuing to drive its growth agenda in the core packaged foods business.
HUL had been struggling with high costs and an unmanageable workforce in the low-margin business. The company has been focusing on core packaged food and beverage brands with higher margins; it exited tea plantations, oil, fats and biscuit businesses over the past decade. Just two quarters ago, it sold its bread and bakery business under the Modern brand to the Everstone Group. Reportedly, HUL's food business accounts for less than a fifth of sales compared with parent Unilever, which gets about 45% of its global sales from foods and refreshments. The stock price of the company finished the day on a negative note (down 0.6%) on the BSE.
The company reported a revenue growth of 3% YoY during the quarter, while profits declined by 22% YoY (Subscription required) for the quarter ended December 2015. The last few quarters for FMCG companies have been troublesome. The earning performance of major companies have been sluggish. This had fizzled out the valuations of major FMCG stocks. FMCG stocks finished the day on a strong note with Nestle and Godrej Consumer leading the gains.
Shares of Torrent Pharma surged more than 4% today after it was reported that the company has successfully obtained the Establishment Inspection Report (EIR) from US Food & Drug Administration (USFDA) for its plant located at Dahej SEZ, in Gujarat. Prior to this approval, the plant has also received approval from EU Germany. It was set up to cater mainly to the regulated international markets such as US, Brazil, Germany etc. With the approval, this plant is now the third plant of Torrent Pharma to receive US FDA approval (Subscription Required), out of its 5 manufacturing units. According to reports, phase-I has an installed capacity of about 7,500 million tablets / capsules and 25 MT active pharmaceutical ingredient (API) per annum. Construction of phase-II will commence soon and once commissioned, the total capacity will increase to about 14,000 million tablets / capsules and 80 MT API per year.
In a parallel development, Aurobindo Pharma has received final approval from the USFDA (Subscription Required) to manufacture and market Dexmedetomidine Hydrochloride Injection, 200 mcg (base)/2 mL (100 mcg (base)/mL) single-dose vials. The product is expected to be launched post Q1 FY16-17.
Reportedly, the approved product has an estimated market size of US$59.1 million for the twelve months ended January 2016. This is the twenty seventh ANDA (including two tentative approvals) to be approved out of Unit-IV formulation facility in Hyderabad, India used for manufacturing general injectable products. Aurobindo now has a total of 244 ANDA approvals (209 Final approvals including 10 from Aurolife Pharma LLC and 35 tentative approvals) from the USFDA.
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