Indian equity markets continued to trade in the positive during the previous two hours of trade after opening firm earlier today. Sectoral indices traded firm except IT, consumer durables and capital goods stocks.
Indian pharma stocks are trading strong led by Fresenius Kabi Onco and Indoco Remedies. As per a leading financial daily, Aurobindo Pharma has received approval from the US Food & Drug Administration (USFDA) to manufacture and market Nafcillin for Injection USP, packaged in 1g and 2g vials and Nafcillin for Injection USP 10g/Vial Pharmacy Bulk Package. These will be marketed and sold by AuroMedics Pharma LLC which is Aurobindo's US subsidiary. With this, Aurobindo now has a total of 171 ANDA approvals (145 Final approvals including 2 from Aurolife Pharma LLC and 26 tentative approvals) from USFDA.
We may note here that Nafcillin for Injection is a sterile semisynthetic penicillin (SSP) indicated in the treatment of infections caused by penicillinase-producing staphylococci which have demonstrated susceptibility to the drug. It must be noted that in 2QFY13, in the API segment, the cephalosporins and penicillins segment grew by a healthy 32% YoY and 23% YoY respectively. One of the reasons why these segments did well was because a couple of players have not really been active in the market giving Aurobindo an advantage. Further, better pricing also bolstered sales from these segments.
Aluminium stocks are trading mixed. Hindustan Aluminium Company (Hindalco) is trading in the green while National Aluminium Company Ltd. (NALCO) is trading in the red. According to a leading financial daily, Nalco is planning to shut down 3-4% capacity, as the prices of imported and e-auctioned coal are unviable. This will be in addition to 8% capacity cut last year. Aluminium requires huge quantities of power, generated by burning coal. Close to 12% of Nalco's coal requirement is met through imports and e-auction and the rest is supplied by state-run miner Coal India Ltd. The London Metal Exchange (LME) rates of aluminium have been hovering at around US$ 2,000 a tonne for a couple of years and nearly 60-70% of aluminium production in the world is at a loss at this price. The company would continue production to the extent of coal available from Coal India and avoid using imported or e-auctioned coal. So, the top line can increase without adding much to the profits.