PINC Sector Report – Pharma Monthly Update | Automobile Monthly Sales Update | Metal Weekly Update |
Deepak Vaishnav
PINC Sector Report – Pharma Monthly Update
NEWS ROUNDUP FOR THE MONTH-DECEMBER
DOMESTIC:
- · Ranbaxy launches generic version of Lipitor with a profit sharing deal with Teva
· Ranbaxy launches authorized generic version of Caduet
· Ranbaxy signs consent decree with the USFDA
· Ranbaxy Labs' consent decree could engulf multiple facilities
· Dr Reddy's shifts drug discovery focus away from heart diseases
· Dr Reddy's offers VRS to Mexico arm employees
· Dr Reddy's splits its marketing division, Acura to resurrect its ailing domestic business
· Dr Reddy's plans Lipitor generic launch in June
· Dr Reddy's launches pain treatment cream 'Supamove' in India
· Lupin's generic Fortamet launch is prohibited due to grant of Preliminary injunction
· Lupin eyes USD300mn revenues from Japan in the next 2 years
· Lupin to replicate Japan model for expansion in various markets
· Lupin receives final approval for Tricor
· Glenmark to initiate filing for Crofelemer as Salix submits NDA
· Glenmark gets DCGI nod for phase III trials of Crofelemer in India
· Sun Pharma's Dilip Shanghvi buys 3.5% stake in Natco Pharma
· IsZo Capital Management LP, minority shareholder of Taro rejects Sun Pharma's Taro acquisition proposal
· Cadila acquires Biochem Pharmaceuticals
· Orchid Chemicals gets USD1.5mn milestone payment from Merck
· Orchid Chemicals to raise USD100mn ECBs to redeem its outstanding FCCBs
· Clinigene, subsidiary of Biocon enters into collaborative clinical research services agreement with Pacific Biomarkers
· Opto Circuits US arm supplies cardiac devices to Australian soccer clubs
GLOBAL:
- · Teva failed to win US clearance for the first OTC emergency contraceptive
· WHO approves Mylan generic HIV drugs for use in developing world
· Mylan wins ruling, overturning generic Doryx antibiotic ban
· Amgen plans to team up with Watson on generics
· GSK to sell non core OTC brands in US and Canada to Prestige Brands Holdings for USD660mn
- 500 drug companies told to pay Rs40bn penalty for over charging
PINC Sector Report - Automobile Monthly Sales Update
HOPE FOR A BETTER 2012
The passenger vehicle industry put in a sedate performance in the month of December with a single digit growth. 2011 started on a promising note with 20% plus growth in the first three months, however, mid way through the year all momentum was lost as rising interest rates and fuel price increases marred sentiment. With an improved performance in Nov and Dec’11, the industry can now look forward to 2012 with anticipation. The new year kicks off with the highly awaited Auto Expo’12 accompanied by a slew of launches. We expect the industry to return to growth from April’12 onwards aided by a softening in interest rates and a depleted base. During the month, Maruti Suzuki (MSIL) dispatches outperformed estimates with a boost from exports. Mahindra & Mahindra (M&M) had a mixed month as disappointme nt in the tractor volumes was compensated by a 25% growth in the automotive division. Commercial vehicle dispatches led by market leader Tata Motors posted a healthy growth on back of sustained demand for small commercial vehicles (SCVs). In the two wheeler space, market leader Hero MotoCorp (HMCL) belied concerns on growth after Bajaj Auto (BJAUT) and TVS Motor posted disappointing volumes. HMCL posted its second highest ever monthly volume, thus beating our estimates by 6%.
· Two-wheelers: HMCL dispatches defied gravity with a 0.7% MoM growth. Although BJAUT posted a YoY growth the management outlook on volumes was cautious. HMSI with increased capacity continued to pile pressure on TVS Motor in its bid to secure the number three spot.
· Passenger Vehicles: MSIL beat our estimates with an aid from exports. The company undertook a planned maintenance shutdown which limited volumes. M&M continues to ride the wave of XUV500 while Tata Motors posted strong volumes both on Indica and Indigo.
· Commercial Vehicles: MHCV makers posted mid single digit growth. LCV volumes continue to post strong growth on demand for the smaller variants.
Our Viewpoint
We expect the passenger car industry to end FY12 with flattish to mildly negative growth in the last quarter. Double digit growth is expected to make a come back in FY13 as monetary policy eases and low base effect kicks in. Although we are positive on the two wheeler industry, the industry could move out of the limelight as focus shifts back to the larger vehicles. Post the sharp correction in stock prices we have upgraded BJAUT and HMCL a notch higher to ‘BUY’ and ‘ACCUMULATE’ respectively.
PINC Research
Infinity.com Financial Securities Ltd.
1218, Maker Chambers V, Nariman Point,
Mumbai – 400021. India
PINC Sector Report – Metal Weekly Update - Metallon Monitor Express
NEWS Corner
US Mfg PMI at 59.9 rose to an 8-mth high in Dec’11, while China's Mfg PMI re-entered the expansion zone at 50.3, an improvement from contraction zone of 49.0 in Nov’11. EU continues to languish with PMI at 46.9 in Dec’11.
As per China Securities Journal, China's consumption of steel products is expected to hit 646mnt in 2012, higher than that in 2011.
Coal India's board approved new pricing mechanism and changed it from Useful Heat Value (UHV) based grading system to Gross Caloric Value (GCV) based classification with effect from 1st Jan'12. As per news reports, this would increase Coal India's blended price by ~15%.
In India, mini steel plants in Chhattisgarh are facing a threat of closure due to the ongoing financial & raw material crisis. As per news sources 30 mini steel plants have closed down and 35 more are on the verge of closure.
Tata Steel Europe is planning to cut output by 15-18% at the units located in Europe on declining demand and lower profitability.
JSW Steel has shut down its 500ktpa Steel service centre in the United Kingdom, and shifted the entire machinery to its Vijayanagar steel plant. JSW Steel bought the three slitting lines and one multi-strand blanking line from its UK subsidiary to JSW Steel Processing Centres, for an undisclosed sum.
Bhushan Steel has put on hold proposed Rs200bn 6.0mntpa steel project in West Bengal due to the state government's decision not to acquire land for industry.
In the non-ferrous space, Chile produced ~458kt of copper in November, down 2% MoM, as lower ore grades and labour unrest hit cathode output. Copper output was down 3.8% in the first 11 months of 2011.
Japan's exports of refined zinc surged to 11.7kt in Nov.'11, up 64% YoY, driven by a three-fold jump in exports to China.
Analyst Corner
India raised iron ore export duties to 30% from 20% to conserve supplies for its steel industry. Although the export duty hike would render exporters in Odisha and Karnataka unprofitable/ uncompetitive, we believe that iron ore industry in Goa would continue to remain profitable, albeit at lower levels.
Further, We believe that hike in excise duty pre-empts the likelihood of a complete ban on iron ore export, which was the biggest overhang on Sesa Goa, India’s largest exporter, based out of Goa. We have the stock UNDER REVIEW.