Nifty50: 17,465 ▼ 45 (-0.2%)
Sensex: 59,463 ▼ 141 (-0.2%)
Dear Reader!
Is taking a dreamy gondola ride in Italy on your bucket list? Well, You might soon have to scratch it.
As per reports, some of the famous Venice canals are drying up due to a prolonged spell of low tides. Undoubtedly, the tourists and gondola operators are frustrated but imagine what it means for Venice because the city has now lost a few of its streets!
And what else seems to have dried up? Profits in the markets… for the 6th straight day.
- The markets ended lower in a volatile session.
- Of the Nifty50 stocks, 26 stocks advanced.
- Investors continue to remain jittery.
Among the Nifty sectoral indices, Oil & Gas (+0.7%) and Pharma (+0.2%) were the top gainers, while Metal (-3.0%) and PSU Bank (-0.8%) were the top losers.
| Top gainers | Today's change |
| ONGC | 154 ▲ 3.9 (+2.6%) |
| Adani Ports | 559 ▲ 7.9 (+1.4%) |
| Asian Paints | 2,741 ▲ 35 (+1.3%) |
| Top losers | Today's change |
| Adani Enterprises | 1,312 ▼ 70 (-5.1%) |
| Hindalco | 415 ▼ 20 (-4.7%) |
| M&M | 1,280 ▼ 33 (-2.5%) |
What’s trending
⭐ Triveni Engineering focuses on ethanol boost
The management of the sugar producer plans to divert 12% of its sugar production towards ethanol. The company aims to increase its ethanol output to 31 crore litres by 2025, by raising its daily ethanol capacity from 660 to 1,100 kilo litres per day. To achieve this, the company’s board has approved capex of ₹460 crore for two new plants.
⭐ KFin Tech forays into new areas
The financial services platform (+0.9%) has acquired a 25.6% stake in Fintech Products and Solutions India (FPSIPL). This will help KFintech to diversify its business and enter into account aggregators and technical service provider segments.
⭐ Olectra Greentech rides on hydrogen thrust
Olectra Greentech (+20%) has developed a hydrogen bus in a partnership with Reliance Industries. The company said it aims to commercially launch hydrogen buses within a year. These buses can travel up to 400 km on a single fill and generate water as tailpipe emissions.
⭐ SpiceJet soars on robust Q3 numbers
The domestic airline (+12%) reported a three-fold rise in its net profit to ₹107 crore for the December quarter. Compared to this, it had reported a profit of ₹23 crore in the same quarter last year. The profit growth was driven by strong performance of passenger and cargo business. During the same period, its revenue from operations rose 4.2% YoY to ₹2,794 crore.
In Focus
Divi’s shares rise in a weak market. Why?
Like its peers in the pharma sector, shares of Divi’s Lab have been under pressure as the pandemic boost waned off. But this week, the active pharmaceutical ingredient (API) manufacturer’s stock rose 3% in a volatile market and versus a 1% fall in the Nifty Pharma index.
Let’s see what could be reason for this:
Easing pricing pressure
A consistent pain point for the domestic pharma companies has been the pricing pressure in the generics segment globally. This is due to intense competition and lack of new generic drug launches.
However, in its recent earnings calls, the management of Divi’s said that it is seeing improvement in the prices as well as volumes in this segment. It added that when volumes improve, prices also follow suit. In fact, analysts believe that the upcoming launches would restore some price sanity.
A $20 billion opportunity
Between 2023 and 2026, $20 billion worth of drugs will be losing their patent protection. Basically, this means certain pharma companies won’t have exclusive rights to make these drugs. To capitalise on this opportunity, Divi’s has filed for making the API for drugs which will be going off-patent.
Contrast media
The company has started commercial production for contrast media. ICDYK, it is used to improve visibility inside the human body during MRI and CT scans. The company hopes that the impact of this segment will be visible on the revenue from Q1 2024 onwards.
Easing costs
In 2022, the margins or profitability of pharma companies were under pressure due to high raw material and logistics costs. Now, the pharma companies could witness some respite on this front too. Divi’s management said that raw material procurement and availability have been stabilised and the prices have slightly softened compared to the last quarter. Analysts also expect that freight costs will be declining gradually.
While the stock has been climbing up this week, it all hinges on whether these tailwinds translate into business growth for the pharma company.
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