Private banks, FMCG, pharma support; Sensex, Midcap flat

Moneycontrol Bureau

11:45am Angel on Ipca import alert: The USFDA has imposed import alerts on Silvassa and Indore (formulation facilities for US) for IPCA.

"Hydroxychloroquine Sulfate and Propanolol Hydrochloride, which accounted for around 45 percent of its total US sales in FY2014, are exempted from the ban. With this all the key US facilities of the company are under USFDA import alert. In FY2014 US contributed sales of Rs 419.6 crore (12 percent of total sales and 20 percent of exports, with Formulation: API mix of around 61:39). Now on back of the ban, around Rs 231 crore worth of sales will be impacted," said Sarabjit Kour Nangra, VP Research - Pharma, Angel Broking.

"Whilst we are negatively surprised by the import alerts, we believe that now IPCA will have to follow the measures laid out by the US FDA to resolve the issue. We have cut the FY2016 EPS numbers by 20 percent. Though the timelines of the resolve are uncertain, we believe the size of the company, and low dependence on US, along with Indian geographies outperforming the market growth, the company can easily sustain a 15-18 percent growth in sales and hence a significant downside is limited. Any downside can be used by investors to buy into the stock, with a long term view on the stock. We remain neutral on the stock," she added.

11:30am HCC bags order: Hindustan Construction Company won arbitration award of Rs 217.18 crore for extension of time (EOT) cost claim in Lucknow-Muzaffarpur National Highway Project after 20 momths of hearing.

Speaking about the project, Praveen Sood, CFO at HCC said a major component of the award is the interest component. The construction company's order book, including L1 projects, stands at approx Rs 18,000 crore, he said.

He informed a few EPC contracts of the company in the past were delayed due to land clearance issues adding that there exists outstanding claims of approximately Rs 4,000 crore with various govt authorities.

HCC has secured Rs 217.18 crore as an arbitration award in the Lucknow-Muzaffarpur National Highway Project case.

11:00am Market Check

The market remained rangebound with the Nifty hovering around 8540-8600 levels. Private banking & financials, FMCG and healthcare stocks supported the market whereas oil & gas, capital goods, metals and power stocks were under pressure.

The Sensex advanced 51.75 points to 28213.47 and the Nifty went up 10.45 points to 8553.40. The market breadth turned in favour of declines with a ratio of 1318:921.

Asian equity markets traded weak, struggling for direction on the back of an uninspiring lead from Wall Street overnight. Brent hovered near USD 55 a barrel while gold traded near 2 and half weeks highs.

Sun Pharma gained 2 percent ahead of a press meet today at 12, which will be most likely to highlight the regulatory nods for merger with Ranbaxy. The stock has been active since CCI gave its final nod for the Sun-Ranbaxy merger.

Tata Motors recovered yesterday's losses, up 1.4 percent ahead of a board meet today to consider detailed terms of proposed Rs 7,500 crore rights issue and consider buy-back of secured non-convertible debentures with face value of Rs 1,250 crore.

NTPC remained in focus as the company has been re-allotted five mines out of the total 43 mines, which were to be allocated to PSUs. CLSA highlighted the re-allocation of these mines is a positive event but key is the execution, which has lagged historically. Also these mines will have limited impact on earnings in the near term.

IPCA Labs tanked 10 percent as the company received an import alert for Pithampur and Silvassa units, which is in addition to import alert imposed on Ratlam facility in January.

Rolta India gained 3.4 percent as the company and Hitachi India establish partnership to explore new business opportunities. The management said that they will do certain projects exclusively with Hitachi and will bid for smart city projects along with them.