Fundamentals April 2, 2013

Nik's Diary

The Indian market opened flat today, tracing the marginally negative opening trades in the SGX nifty and the mixed opening across major Asian bourses. The US markets ended the day lower on Monday after showing a notable move to the upside last week. The weakness came following the release of report from Institute for Supply Management showing a notable slowdown in the pace of growth in the manufacturing sector which fell to 51.3 in March from 54.2 in February. The disappointing manufacturing report overshadowed a separate report from the Commerce Department showing a notable rebound in construction spending. Meanwhile, Indian markets rose on Monday despite weak Asian cues and disappointing economic data. India's CAD widened to a record high 6.7% of GDP in the 3QFY13, however, it failed to have any considerable impact on investor sentiment. Investors also shrugged off disappointing manufacturing PMI data after a knee-jerk reaction. 

SC rejects the Novartis patent plea for Glivec

In a major blow to Swiss pharma giant Novartis, the Supreme Court on Monday rejected its plea for a patent on cancer drug Glivec, a verdict that is expected to pave the way for Indian firms to provide affordable drugs to lakhs of cancer patients in the country. Ending a seven-year legal battle by Novartis to have exclusive right for manufacturing Glivec and to restrain Indian firms from making generic medicines, the apex court while dismissing its plea held that there was no new invention and no new substance used in the drug prescribed for treating blood, skin and other types of cancer. Indian pharmaceutical companies had opposed the claim of Novartis saying it is not entitled for the patent and alleged that it is indulging in “ever-greening” of patent by simply changing the composition of the ingredients of the drug. A Bench comprising justices Aftab Alam and Ranjana Prakash Desai dismissed the claim of the Swiss firm seeking exclusive rights for manufacturing the cancer drug. The Bench held that ‘imatinib mesylate’ used in Glivec is a known substance and Novartis can’t claim patent over the drug for using this chemical. It is stated that a one-month dose of Glivec costs about `1.2 lakh, while generic drugs, manufactured by Indian companies, cost about `8,000 for the same quantum. Thus, the verdict is seen as a great boon for cancer patients in India. Justice Aftab Alam, writing the judgment, noted that Novartis had filed an application on July 17, 1998, for grant of a patent for imatinib mesylate in beta crystalline form at the Chennai Patent Office. After the application was made and before it was taken up, several amendments were introduced in the Indian Patents Act, 1970, bringing about fundamental changes in the patent law of the country, he noted. The Assistant Collector of Patents and Designs heard all the parties in December 2005 and rejected its patent application of Novartis. After this, Novartis filed two writ petitions in the Madras High Court seeking a declaration that Section 3(d) of the Patent Act is unconstitutional. However, the High Court dismissed them. The Intellectual Property Appellate Board also dismissed Novartis plea challenging the Assistant Collector’s orders. Source: newindianexpress

L&T has bagged `5,689cr contract in Rajasthan

Larsen & Toubro (L&T) has bagged a complete engineering, procurement & construction (EPC) order. The company, on Friday, announced that it had secured an order of Rs. 5,689 crore from the Rajasthan Rajya Vidyut Utpadan Nigam for setting up a 2 x 660 MW supercritical thermal power project on a complete EPC basis. The project has a stringent completion schedule of 42 months for Unit 1 and 45 months for Unit 2. The company’s manufacturing plant in Hazira has joint ventures with Mitsubishi Heavy Industries to make supercritical boilers and turbines. “The plant is very new, and it is premature to say what the break-even point would be,” S.N. Roy, senior executive vice-president & member of the board of L&T, told a press conference here. With the Rajasthan contract, L&T now has orders for supply and installation of 26 supercritical steam generators and steam turbine generators of 660 MW, 700 MW and 800 MW. The plant has a capacity of around 5,000 MW per annum, and this can be expanded to 6,000 MW. 

Increased utilisation “But we would be well off at a 60-65 per cent capacity utilisation at the plant,” Mr. Roy said, adding that the current order would increase capacity utilisation to 70-75 per cent. He said that L&T was doing up to 91 per cent of EPC project in-house, with the rest coming from vendors. He added that there were 8 large orders likely to come up for bidding this year and that “we are starving for orders and expect to get about 2 to 3 of them. There is no order likely to come this quarter, and we can take up to 50 per cent more orders. Our order book for power plants is at Rs. 25,000-26,000 crore and the mix is 30:70 between public and private sector. The Rajasthan order would change it to 50:50.” Source: thehindu

Coal India misses FY2013 production target 

PTI reported that Coal India Limited has achieved an output of only 452.5 million tonnes for the just concluded fiscal, missing the target of 464 million tonnes. CIL CMD Mr S Narsing Rao said “We produced 452.5 million tonnes of coal in the last fiscal while the off take was 465 million tonnes.” The Coal Ministry had earlier said that CIL would miss the production target for the FY 2013 by 2 million tonnes to 3 million tonnes. It had attributed the shortfall to workers strike and other issues. The Coal ministry has set a production target of 482 million tonnes and off-take of 492 million tonnes for CIL for the current fiscal. Source - PTI

DRL- Launches Zenatane in US market 

Hyderabad-based pharmaceutical major Dr Reddy’s Laboratories (DRL) stated that it has launched Zenatane in 20 mg and 40 mg in the US following its approval by the United States Food & Drug Administration (USFDA). Zenatane, used for the treatment of acne, is a therapeutically-equivalent generic version of Accutane (Isotretinoin capsules USP) in the US market. The total value of the drug sales in the US was approximately $309 million for the 12 month-ending January 2013, according to IMS Health. DRL’s Zenatane capsules will be available in boxes of 30 (three prescription packs of 10 capsules). This comes just weeks after Dr Reddy’s announced that it had launched Zoledronic Acid Injection (4 mg/5 mL), a bioequivalent generic version of Zometa (zoledronic acid) 4 mg/5 ml injection in the US market  March 4, 2013. Dr Reddy’s Zoledronic Acid Injection 4 mg/5mL is available in a single use vial of concentrate. Source: Business Standard

Ranbaxy Labs resumes the supply of Atrovastatin Tablets in the US markets 

Drug major Ranbaxy Laboratories on Monday said it has resumed the supply of Atorvastatin calcium tablets, a cholesterol lowering drug, in the US market. "Ranbaxy Pharmaceuticals Inc, the US subsidiary of Ranbaxy Laboratories Ltd, has resumed the supply of Atorvastatin calcium tablets that includes 10 mg, 20 mg, 40 mg and 80 mg dosage strengths to the US market," Ranbaxy Laboratories said in a BSE filing. The company had stopped production of generic version of cholesterol lowering drug Lipitor last year as it investigated the issue of potential glass particles in certain lots of the drug. On November 9, 2012, Ranbaxy had informed customers of a voluntary recall of certain lots of the company's 10mg, 20mg, and 40mg dosage strengths of atorvastatin tablets from the US market. The lots of atorvastatin, packaged in bottles of 90 and 500 tablets, were recalled due to possible contamination with very small glass particles similar to the size of a grain of sand (less than 1 mm in size). Ranbaxy had launched generic atorvastatin in the US market in December 2011, after the USFDA gave final approval to market its generic version of Lipitor produced at Ohm Laboratories facility in New Brunswick, New Jersey. The Gurgaon-headquartered firm supplies the generic version of Lipitor to the US market from its two facilities -- NewBrunswick-based Ohm Laboratories and Mohali plant in India. Shares of Ranbaxy Laboratories were trading at Rs 450.35 apiece on the BSE in late afternoon trade, up 2.38 percent from their previous close. Source: Zeenews

IVRCL monetizes `2,200cr BOT projects to TRIL Roads

IVRCL Ltd said on Friday it will sell its stakes in three road projects in Tamil Nadu to TRIL Roads Pvt Ltd, a unit of steel-to-salt conglomerate Tata Group. The 154.83 km-long roads are build-operate-transfer (BOT) projects with a total project cost of Rs. 2,200 crore, it said in a statement. IVRCL has plans to sell three more assets out of 9 BOT projects within a span of six months, it added. Shares of IVRCL closed nearly 13 per cent higher at Rs. 21.75, outperforming the Sensex which closed up 0.15 per cent. Source: NDTV

KEC International wins orders worth `914cr

KEC International, a RPG Group company, has secured orders worth Rs 914 crore in transmission, power systems and cable businesses from domestic and overseas markets. In the transmission business, SAE Towers, KEC’s wholly owned subsidiary, has bagged orders worth Rs 73 crore from Canada. It has also secured orders for lattice towers and hardware from Canada, the US, Brazil and Mexico, totalling Rs 115 crore. In Indonesia, KEC has bagged a Rs 129-crore order from the state electricity corporation for the design, supply and erection of a 150-kV transmission line. In Saudi Arabia, it has got a similar contract worth Rs 196 crore for a 380-kV transmission line. Power Grid Corporation has awarded a Rs 219-crore contract to KEC for a 400-kV transmission line between Kurukshetra and Jalandhar and a 220-kV line from Jalandhar to Hamirpur. In addition, orders from existing transmission projects total Rs 68 crore. In the power systems business, KEC has secured a Rs 40-crore order for setting up a 765-kV gas insulated substation (GIS) in Tamil Nadu from PowerGrid. This marks the company’s entry into the 765-kV GIS substation space, KEC said. In addition, KEC has got Rs 74 crore worth orders for the supply of power and telecom cables. Source: thebusinessline