Sun Pharma slumps after US issues new reprimand to India drug industry

23 Dec 2015 | Author: | No comments yet »

13 top stocks in focus today: Sun Pharma, Mphasis, Kesoram Industries and more.

The BSE Sensex that opened in negative terrain on Monday wiped off its inital losses and was trading over 100 points up in morning trade on Monday. Shares of Sun Pharmaceuticals were in focus early Monday trade, with the stock taking a knock of over 7 percent after the company received received a warning letter from the USFDA over violation of manufacturing norms in its facility at Halol in Gujarat.

While the current weakness in Information technology (IT) and pharmaceuticals is a big drag on the market, Ajay Srivastava of Dimensions Capital says one must add to their pharma portfolios no matter what happens.Investors who bought Sun Pharma shares in the past few weeks believing that the stock was oversold and that the downsides were priced in could be in for a negative surprise. So, to that extent, I am always saying that – what surprised me is that the out-reach programme that we had with the US, I thought would give us exactly the reverse benefits. So, we were a lot more bullish because this whole thing was supposed to resolve Food and Drug Administration (FDA) driven problems or at least bring them at par, but they have got them to a boil. In a release issued to BSE, Sun Pharma said, “Post the September 2014 inspection, the USFDA has withheld future product approvals from the Halol facility.

The company and its US arm Glenmark Pharmaceuticals Inc have entered into a settlement agreement with Forest Laboratories LLC, Forest Laboratories Holdings Ltd and Royalty Pharma Collection Trust to settle the litigation. And not only pharma, IT – look at the attack on IT – H-1B, etc. coming in.” “There is a challenge out there, but I am still a firm believer that if you are building a 3-5 year portfolio, pharma stocks is a great place to be in and if these are opportunities, so be it, you buy into them.

This situation may continue until all issues are resolved. “Sun Pharma expects to request a re-inspection by USFDA upon completion of its remediation commitments,” According to a Reuters report, the fresh warning letter could mean the regulatory may ban imports from the plant under scrutiny if the problem persists for long. Kesoram Industries: Shares of the company hit upper circuit on Monday after the BK Birla group company on Saturday said its board has approved a proposal for raising up to Rs 650 crore through issue of securities. Sonia: The last two weeks of the year are left, so it is time to be jolly but cannot be so sanguine about the markets as well given the kind of turbulence. The plant assumes significance for the company as it can manufacture injectable products, which are difficult to make and hence a niche and lucrative market for drugmakers.

Most of the issues in the warning letter are the same as those in the report sent in September, Sun Pharma’s Managing Director and Indian billionaire Dilip Shanghvi, said in a conference call late on Saturday. However, the Halol plant is critical for Sun’s growth, contributing a high single digit percentage to the Sun’s total revenues and is the only facility from where the company has filed application in the US for injectable drugs. Tata Motors: The automaker has entered the top-50 league of the world’s biggest companies in terms of their R&D investments, topped by German automaker Volkswagen. However, as January 15 comes, we should be more circumspect about the results when they start to come out because suddenly we are not feeling good about what we are seeing. Infosys, Wipro, TCS and Tech Mahindra: Stocks of the Indian IT major will be in focus as US President Barack Obama on Saturday signed into law a $1.8 trillion spending package which among other things introduces a hefty $4,000 fee for certain categories of H-1B visa and $4,500 for L1 visa.

So yes, there are trading bounces and today is one such day when you see it, because the foreign institutional investor (FII) selling has stopped, so there is comfort in buying today. United Bank of India: The bank plans to raise Rs 1,500 crore through preferential allotment of shares.The Board of Directors at its meeting on Friday approved to raise equity capital. You raise a very valid point that 2015 has become a place where if you can get away with not significant losses, you have done a good job with your portfolios. 2016 — one segment stands out very clearly to me is the heavy commercial vehicles (HCV) and the light commercial vehicles (LCV) segment.

That segment is going to get a lot of traction because if the law, what has changed in National Capital Region (NCR), changes everywhere in this country, the replacement demand is going to be huge. Not only pharmaceutical, all the healthcare stories including Contract Research And Manufacturing Services (CRAMS) companies like Syngene, which we are owners in the stockholding etc and pharmaceutical of course, the disclosure, we have stockholdings in most stocks, but this healthcare story, you need to buy into rather than sell into a problems. A: Where we are positioning, our stocks at this point of time is that we are going very heavily into two kind of stocks and we are buying into them which are stocks like, which have zero leverage and one which I can disclose the stock, things like Venkys , things like Syngene, things which are very strong and they are in their range.

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