NIFTY50: 19,778 ▲ 97 (+0.5%)
SENSEX: 66,707 ▲ 351 (+0.5%)
Hello, folks!
If you like tuning into your favourite songs while driving, there’s a highway that strikes the chords. Road 37 in Hungary is designed in such a way that it plays a popular folk song if a car passes on it at the right speed. That’s music to drivers’ ears, literally! Traders were also back in the groove today as the markets moved up after three days. More on that later.
- Markets moved up decisively, with Nifty closing above 19,750 after three sessions
- In all, 31 of the NIFTY50 stocks closed in the green
- Investors are looking forward to interest rate decision by the US Fed
Among the NIFTY sectoral indices, PSU Bank (+1.5%) and Realty (+1.1%) were the top gainers, while Auto (-0.01%) closed flat.
| Top gainers | Today's change |
| L&T | 2,652 ▲ 91 (+3.5%) |
| Cipla | 1,079 ▲ 24 (+2.3%) |
| ITC | 472 ▲ 10 (+2.1%) |
| Top losers | Today's change |
| Bajaj Finance | 7,474 ▼ 132 (-1.7%) |
| M&M | 1,545 ▼ 19 (-1.2%) |
| Apollo Hospitals | 5,147 ▼ 65 (-1.2%) |
What’s trending
⭐ Shree Cement rises after Q1 results
Shares of Shree Cement rose 2.6% after the company reported an 84% year-on-year (YoY) jump in its Q1 net profit to ₹581 crore. During the same period, its revenue from operations grew 19% YoY to ₹4,999 crore. The company also plans to increase capacity by 12 million tonnes at an investment of ₹7,000 crore, which will be funded via internal accruals and debt.
⭐ BPCL gains after strong results
State-owned oil marketing company BPCL reported robust June quarter results. Its net profit was at ₹10,644 crore in Q1FY24, compared to a loss of ₹6,148 crore in the same period last year. This rise in profits came. This rise in profit came as fuel marketing margins improved during the quarter as the retail price of petrol and diesel remained largely unchanged despite a fall in international oil prices.
⭐ Ajmera Realty soars on strong Q1 results
Ajmera Realty shares were up by over 4% after the company recorded a 113% YoY growth in revenue at ₹118 crore and an 82% YoY increase in net profit at ₹21 crore in Q1FY24. The realty developer attributes the robust growth to strong sales from its residential projects in Mumbai and Bengaluru.
⭐ Crude oil trades lower
International crude oil prices edged lower today, with Brent crude trading at $82.3 per barrel, down 1.1% ahead of the US Federal Reserve interest decision. As per market expectation, the US central bank could hike its policy rates by 0.25% in today’s meeting.
In Focus
Pharma stocks in pink of health
Shares of pharma companies are gaining strong traction of late. So far this month, the NIFTY Pharma index has risen 5.1%, as compared to the 3.0% rise in the NIFTY50. This comes amid improved fundamentals in the pharma industry. Which are these? Let’s explore.
Revenue growth to improve
A new report by rating agency Icra expects the Indian pharma industry to see 7-9% revenue growth in FY24, primarily supported by 8-10% expansion in the domestic formulation business and 6-8% growth in the US market.
Profits to get a shot in the arm
In addition, stable raw material prices as well as freight costs in the last few months are likely to boost near-term profitability of pharma companies. Furthermore, domestic revenue will be supported by price hikes of over 12% on various pharma products under the national list of essential medicines (NLEM) as well as new product launches.
Results reflecting growth drivers
Some of these factors are already reflected in quarterly results of Dr. Reddy’s Labs and Cipla. Dr. Reddy’s revenue jumped 29% YoY to ₹6,738 crore, while its net profit rose 18% to ₹1,402 crore. Meanwhile, Cipla reported a 17.7% rise in revenue to ₹6,329 crore, with net profit of ₹996 crore, up 45.1% YoY.
Other key factors
Besides this, domestic pharma companies are focusing on complex generics and specialty products. Further, multiple key drugs are likely to go off-patent in the US market in the next three years. This offers excellent growth opportunities for Indian firms. The cumulative value of these off-patent drugs is expected to be around $115-125 billion.
All in all, pharma companies seem to be in the pink of health. However, investors should keep a close eye on the USFDA actions, especially on company-specific warnings on manufacturing facilities. These could have a negative impact on the sector.
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