Firm trade continues in Indian markets

A firm trade continued in Indian equity markets in early afternoon deals, with both Sensex and Nifty trading notably higher, aided by heavy buying at Realty and Metal counters, despite mixed cues from other Asian markets. Sentiments remained upbeat, as Governor of the Reserve Bank of India (RBI) Shaktikanta Das said that RBI's endeavour is to promote a financial sector which is robust, resilient and future ready. Adding more relief among traders, Government e Marketplace (GeM) has closed the financial year FY24 with Rs 4 lakh crore in Gross Merchandise value (GMV). This testifies to the portal’s unique digital capabilities and functionalities that have facilitated greater efficiency, transparency, and seamlessness in public procurement.

On the global front, Asian markets are trading mixed, as Japanese large manufacturers' business confidence weakened in the first quarter and it is set to fall further in the coming three months. The results of the quarterly Tankan survey by the Bank of Japan revealed that the headline sentiment index for big manufacturers fell to 11 in the March quarter from 13 in the preceding period. This was the first drop in a year. 

Back home, pharma companies stocks were in watch, as credit rating agency ICRA in its latest report has said that the revenues of its sample set of 25 Indian pharmaceutical companies (which account for around 60% of the overall Indian pharmaceutical industry) is likely to grow by 8-10% in FY2025, post a YoY increase of 13-14% in FY2024. 

The BSE Sensex is currently trading at 74058.84, up by 407.49 points or 0.55% after trading in a range of 73943.15 and 74254.62. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index jumped by 1.41%, while Small cap index was up by 2.47%.

The top gaining sectoral indices on the BSE were Realty up by 3.79%, Metal up by 2.98%, Telecom up by 2.78%, Basic Materials up by 2.40% and Utilities up by 2.38%, while Consumer Durables down by 0.21% was the only losing index on BSE.

The top gainers on the Sensex were JSW Steel up by 4.81%, Tata Steel up by 4.07%, NTPC up by 1.73%, Larsen & Toubro up by 1.71% and Ultratech Cement up by 1.45%. On the flip side, Titan down by 1.52%, Nestle down by 1.23%, Bharti Airtel down by 1.08%, Tech Mahindra down by 0.49% and ITC down by 0.37% were the top losers.

Meanwhile, credit rating agency ICRA in its latest report has said that the revenues of its sample set of 25 Indian pharmaceutical companies (which account for around 60% of the overall Indian pharmaceutical industry) is likely to grow by 8-10% in FY2025, post a YoY increase of 13-14% in FY2024. Following the high base of FY24, the revenue growth momentum from the US and Europe markets is expected to moderate to 8-10% and 7-9%, respectively, from the YoY expansion of 18-20% and 16-18%, respectively, estimated for FY24. The domestic market is expected to see stable growth at 6-8%, while the emerging markets may log in an 8-10% rise in FY25, against 16-18% in FY24.

According to the report, the revenue growth of the sample set companies in the US market in FY24 has been supported by increased new product launches, product shortages in select therapeutic segments, and healthy performance of complex generics (first to file). However, as the base effect plays out, growth is expected to taper in FY25. While low single digit pricing pressure in the US market is likely to sustain, Indian pharmaceutical companies remain focused on enhancing their revenue contribution from the complex generics in the US market. In the European market, revenue growth for the sample set picked up considerably in the current fiscal, largely on the back of a low base, uptick in the base business (both branded and generics segment), new product launches (especially injectables) and incremental revenues from new tender wins (in countries such as Germany).

The report further said in contrast to the healthy growth from the US and European markets, growth in the domestic market in FY24 was impacted to an extent by the change in composition of the National List of Essential Medicines (NLEM), which led to a decline in realisations for certain drugs, in addition to an uneven monsoon, which affected acute therapy sales. Furthermore, a one-time reduction in channel inventories by one of the sample set companies also impacted the overall growth. That said, the 6-8% YoY expansion in revenues is supported by sales force expansion and increased medical representatives’ (MR) productivity, new product launches with enhanced reach and market share gains for some of the sample set companies. Going forward, sustained price growth and revival in volumes, supported by new product introductions, are expected to continue to support revenue growth from the domestic market. That said, developments on the trade generic policies would be a key monitorable. 

The CNX Nifty is currently trading at 22471.85, up by 144.95 points or 0.65% after trading in a range of 22443.35 and 22529.95. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were JSW Steel up by 4.96%, Tata Steel up by 4.20%, Shriram Finance up by 2.35%, Adani Ports & SEZ up by 2.22% and Divi's Lab up by 2.17%. On the flip side, Titan down by 1.52%, Nestle down by 1.23%, LTIMindtree down by 1.16%, Eicher Motors down by 1.05% and Bharti Airtel down by 1.01% were the top losers.

Asian markets are trading mixed; Taiwan Weighted lost 72.12 points or 0.36% to 20,222.33, Jakarta Composite plunged 131.61 points or 1.81% to 7,157.20 and Nikkei 225 slipped 566.35 points or 1.42% to 39,803.09, while Straits Times rose 14.75 points or 0.46% to 3,238.76, Shanghai Composite strengthened 34.95 points or 1.15% to 3,076.12 and KOSPI increased 1.23 points or 0.04% to 2,747.86.