The News International Team
01:00pm Strides on buyers’ radar
Shares of Strides Arcolab gained 1.5 percent after Macquarie has included its top small-cap pick in India with a target price of Rs 950. The brokerage feels that its dividend could be a near-term catalyst and is positive that generic business will deliver strong growth going forward driven by market share ramp-up of recent launches.
“During the last earnings call, Strides Arcolab had highlighted that from USD 390 million of receivables from Mylan, it expects contingent holdback (of USD 250 million) to get released in Q2 FY15. With 20 days left for Q2FY15 end, dividend could be a near-term catalyst,” it said in a report.
After retaining USD 50 million for the Biotech business, the drug company intends to distribute the remaining cash (post tax) as dividends. USS 40 million of regulatory escrow will be released post full resolution of FDA issues by Mylan and USD 100 million of tax escrow after three years.
Ravi Kannan, Director and CEO of Snowman Logistics says the company expects to maintain growth rate of last few years with clear visibility on expansion plans. He says the cold chain solutions provider will add another 35 percent to its capacity in FY15. “We are looking to expand to tier II and tier III cities,” he told CNBC-TV18.
He is confident of stable growth going forward. “We may take the number of depots to 37 from the current 25 by fiscal-end,” he says.
Snowman Logistics saw huge buying appetite on listing day itself, starting trade at Rs 75 (the equilibrium price arrived in pre-opening session) on the Bombay Stock Exchange. That is 60 percent returns for investors over the issue price of Rs 47, which is more than grey market premium of 25-30 percent premium.
Kannan says the money raised from the IPO will be partially used to pay back a bridge loan.
12:00pm The market remained lacklustre in trade today with the Sensex gaining 21.13 points at 27017 and the Nifty rising 2.75 points to 8088.45 ahead of August CPI and July industrial output data. FMCG, auto and steel stocks supported the market whereas heavyweights like Infosys, Reliance and L&T were under pressure.
About 1509 shares have advanced, 1203 shares declined, and 87 shares are unchanged on the Bombay Stock Exchange.
Gaurav Mehta, VP – Institutional Equities, Ambit Capital expects a near-term correction that will help market from being complacent.
Ambit Capital is of the view that the Nifty has been in a structural uptrend post breakout above 6350. A fresh breakout may be seen if Nifty sustains above 8130-8150, 8150 being crucial resistance. In addition, Mehta has a 30,000 target on the Sensex in FY15.
Cipla topped the buying list, up over 2 percent followed by ITC, Tata Motors, HDFC, TCS, Bharti Airtel, Maruti, HUL, GAIL and Sesa Sterlite with 0.5-1 percent.
However, aluminium major Hindalco Industries lost nearly 3 percent. Drug maker Sun Pharma trimmed losses to 1 percent from 3.5 percent in early trade while Infosys, L&T, Reliance, NTPC, ICICI Bank, Wipro, SBI and Coal India declined 0.3-1.3 percent.