Sensex Opens in Red; Sun Pharma Falls 1.8% on Weak Q2 Result
Asian stock markets are lower today after weaker crude oil prices and doubts about US tax reforms took a toll on Wall Street. The Shanghai Composite is off 0.73% while the Hang Seng is down 0.70%. The Nikkei 225 is not down 0.93%.
Meanwhile, Indian share markets too have opened the day in red. BSE-Sensex is trading lower by 69 points and NSE-Nifty is trading lower by 19 points. S&P BSE Mid Cap is trading down by 0.1% and S&P BSE Small Cap is trading down by 0.2%.
Losses are largely seen in metal stocks and realty stocks. The rupee is trading at Rs 65.52 against the US$ .
Sun Pharma share price opened the trading day down by 1.8% on the BSE after the company reported a 59.19% dip in consolidated net profit to Rs 9.12 billion beating street estimates for the quarter ended on September 30, 2017 compared to the year-ago quarter.
The company had posted a net profit of Rs 22.35 billion for the corresponding period of the previous fiscal. Consolidated total revenue from operations stood at Rs 66.50 billion. It was Rs 82.60 billion in the same period of previous year.
A challenging US generic pricing environment coupled with continued investments in building global specialty business has impacted the company’s Q2 performance.
The US Food and Drug Administration (FDA) had issued a warning letter to the Halol unit in December 2015 for violation of good manufacturing practices. Since then, new product approvals have been held back by the regulator.
The company’s sales in the US, which contributed 30% to the total revenue, fell 44% to US$ 309 million in the quarter due to pricing pressure in existing products and lower contribution from generic of cancer drug Gleevec.
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In another development, Biocon’s subsidiary Syngene International has expanded its ongoing drug discovery and development with US-based Bristol-Myers Squibb till 2026.
As per an article in The Economic Times, the expansion will enable the two companies to undertake a greater range of scientific research and development for pharmaceuticals across a broader range of activities.
As part of the expansion, Syngene will set up a new dedicated facility spread across 25,000 sq ft of laboratory and office space for Bristol-Myers Squibb.
Biocon share price opened the trading day up by 1.8% on the BSE.
Indian pharma companies catering to the US markets are breathing a sigh of relief. After being adversely affected by import bans and the suspension of new drug approvals from manufacturing facilities in the past three years, there has been a sharp pick-up in new drug approvals in FY17.
Generic Drug Approvals Hit The Roof
With an aim to lower the overall healthcare costs in the country, the USFDA approved a record 763 generic drugs for the financial year ending 30th September. As per Mint Analysis, Indian pharma companies received 295 approvals accounting for 40% of the overall approvals during the year.
Moving on to news from mining sector. As per an article in The Economic Times, Coal India is in talks with the railways to increase rake loading from an average of 216 so far since April to 250 by the end of the fiscal year.
This comes at a time when the company seeks to meet increased demand with both power and non-power sectors facing a short-supply of the dry fuel.
As per the reports, reduction in generation from non-thermal sources like hydel and wind resulted in increased demand for thermal power over the past few months. This led thermal power generators, which were witnessing damp demand during April and May, to ask for additional coal since they were using up stocks at a faster pace.
Meanwhile, Coal India posted 40% drop in net profit to Rs 3.69 billion for the quarter ended September 30 as compared with Rs 6.12 billion same period last year. A key factor that drove the miss was that CIL made a provision of Rs2,300 crore towards wage settlement in its employee costs.
Meanwhile, at a time when the benchmark Sensex has risen 12.5% so far this fiscal, Coal India shares have dropped about 3%. Concerns on volume growth and uncertainties surrounding wage negotiations are some factors that clouded sentiments.
Coal India share price opened the trading day down by 0.9%.
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