India Morning Report: Glenmark, Biocon investors start backing out

Planned portfolio additions in Pharma would suffer even as Ranbaxy’s troubles hit another Big Screen release in Toansa, US plants getting fogged by USFDA. Ranbaxy expects to lose momentum on launches of Diovan and Nexium putting aid to revenues recovering to potential in the US and along expected lines with portfolios already shunning the stock. Toansa plants account for Atorvastatin production among others.

However, Biocon and Glenmark pace corrections have not been suitably pledged into expectations with Institutional investors waiting for a secular India recovery and retail investors, barely out on the hunt probably cannot be blamed as they decide to wait longer. Glenmark rally may be sold on results so one should wait post results and try for 500 levels. Ashwini had a big fail day again recommending a volatile Adani at 6350 levels ( for apparently rush hour investing at the top)

Markets were peaking at 6350 and will retreat to 6250 at leisure leaving F&O PCR fully divested to 0.9 and even at 1.0 levels new Interest avoids the markets after the unsuccessful attempt to club IT and Pharma earlier. Bharti stays up and there is probably room for HUL and ITC both , but as the same is untenable in the medium term positional traders likely continue to prefer ITC.

Results Season draws to a virtual close except for IDFC, ICICI Bank and SBI that report along expected lines and are positive, positive and negative for markets.

I would not lose this chance to accumulate on all good Banknifty stocks including PNB and ICICI Bank and shun BOB and others after the Dividend run ( SELL on ex Dividend valuation targets)

Midcap index breakdowns could be ugly but runs have been stock specific and individual reccommendations hold ( as always for the best stocks only)

Currency weakness seems to have mirrored in Fixed Income markets as soon as breathing space was abvailable in the yield and Bonds are a great buy if available at quoted rices over the weekend to probably 8.4 levels on and after Policy Tuesday. Short yields on newly minted IRFs. The extinguishing f currency notes should be a small quiet affair with only INR 3 Tln ( 12% of 2013 Balance sheet Assets)

Higher Education sector’s fortunes are diametrically opposite to that of Online ed and I would aver Online Ed stocks and vocationally listed concerns should be avoided.

Spectrum auctions are due Feb 03, 2014 as bidders get verified over the weekend

In unlisted business, Air Asia’s launch is getting nearer and IndiGo from the new Bhatias is finally moving on expanding is footprint with the government closer to removing restrictions on International routes in the new phase for Aviation with etihad and Air Asia. Indian listed concerns continue to rely on getting out of the rut with a mix of budget and high end investments in metros and investment in the sector is active. Prism and Destimoney bring in some new unlisted business in the Financial service s area if their proposal is accepted at the FIPB review

The last FIPB meeting had seen approvals for KKR Floorline (Gland Pharma and others) , GSK and Hospira (Singapore).

GSK is spending INR 64 Bln on buying its Indian stake as already completed.

Hospira is injecting $300 mln in the India operations ( around buy from Orchid Chem) with Cadila

The February meeting is unlikely to have any important proposals though Lupin was hanging in balance after the January meeting. Abbvie apparently plans to come back too.

The February hopefuls include a half dozen Infra projects from L&T, Mordril and Welspun to Brightstar and Westbridge PE also applying in mid 2013.

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