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From Lupin to Dr. Reddy’s, year may end on a good note for pharma firms

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The year is likely to end on a good note for Indian pharma companies as analysts expect an uptick in US sales. Around 13 -15 per cent year on year growth is expected in revenues primarily on the back of good product launches by firms like Lupin, Dr. Reddy’s Laboratories etc. On the domestic front, too a 9-10 per cent growth is expected by most brokerages led by price growth as the long winter impacted volume growth here.


During the previous quarter too, the Indian drug firms had reported a better than expected performance in the US. Foreign brokerage firm CLSA said, “We believe that trend could continue in the medium term given rising drug shortages in the US driven by the discontinuation of products by large generics, plant-specific issues impacting certain companies, and stringent failure to supply penalties from customers.”



It added that drugs in shortage in the US have spiked to 112 drugs, which is the most since 2012. Drug shortages are the highest in the paediatric, cardiac and gastro therapies.


“The valsartan (hypertension drug) issue is well known. After several recalls, the US market now has a shortage of the drug and a handful of Indian companies now had approval to launch it there. This provides a short to medium term opportunity for these companies, who will have some pricing power in the market,” said a senior executive of a drug firm which has recently got an USFDA nod to launch the drug there.


The flu season in the US too picked up towards the end of the quarter.


A recent ICICI Direct report highlighted that formulations growth is likely to be driven by an 18.4 per cent growth in the US led by waning price erosion, opportunities created by high profile exits and new launches in limited competition products. “On the companies front, Aurobindo (US injectable traction and acquisition), Biocon (biologics traction), Cadila (US limited competition opportunities, and acquisition) and Divi’s (API opportunities) are likely to register above 20 per cent growth in revenues,” the report said.


Antique Stock Broking pointed out that on a quarter on quarter basis, the Rupee has appreciated by 2 per cent against the US dollar and around 3 per cent against the Euro, which would negatively impact the exporters.


On the domestic front, the fourth quarter promises better growth than the previous one. Antique analysts said that while the growth during the third quarter was around 9 per cent, in January and February the growth has been around 9.8 per cent and 11.3 per cent respectively. ” Much of this growth has been led by price while volume has been growth has been in low single digit. The longer than expected winter may impact some volume uptick in March,” the report said.


ICICI Direct analysts too felt that domestic formulations and Europe are expected to grow by 9 and 16 per cent respectively. The active pharmaceutical ingredients (API) and Contract Research and Manufacturing Services (CRAMS) businesses are likely to grow strong mainly due to direct advantage of Chinese capacity constraints and strong order book.


“On the other hand, Ajanta, Natco and Indoco are likely to report negative revenue growth mainly due to slow growth in domestic formulations and high base,” it said.



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Adani arm acquires defence electronics and avionics firm Alpha Design

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Adani Enterprises said on Saturday its subsidiary, Adani Defence Systems and Technologies, has acquired Alpha Design Technologies.


“Adani Defence Systems and Technologies — a wholly owned subsidiary of the firm — has acquired the control of Alpha Design Technologies,” Adani Enterprises said in a BSE filing.



The company did not reveal the deal value.


The acquired firm provides Adani Defence and Aerospace a strong tier-1 capability for building a base for graduating to platform capabilities, the filing said.


Alpha Design was established in 2003 for the design, development and manufacture of defence electronics and avionics.


Its key business areas includes, defence electronics, avionics, aero-structure assemblies, space and satellite systems and simulators among others.


The consolidated turnover of Alpha Design Technologies in 2017-18 was Rs 218 crore, Rs 210 crore in 2016-17 and Rs 419 crore in 2015-16.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)



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TikTok ban likely to shadow FDI plans of tech firms, says IAMAI

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Reacting sharply to the nationwide ban on short video messaging app TikTok, industry body Internet and Mobile Association of India (IAMAI) said that the ban might affect future plans of companies to invest in India.


In a statement it said the move would impede FDI in digital if intermediaries were to be banned quite arbitrarily by the courts in the country. While not naming TikTok, the association said that it was responding to the recent ban by the MeiTY on the order of a High Court.



The association was of the view that such bans dilutes the safe harbour provisions currently contained in the IT Act and its Rules and make it impossible for them to operate in the country.


“Especially affected would be the so called social media platforms which allow citizens to express themselves. Content moderation on user generated content platforms has been a problem about which the platforms themselves are keenly aware and have taken effective measures in recent months to curb the excesses. The Code of Ethics adopted by all social media platforms with the Election Commission is a case in the point,” IAMAI said.


It further said that in this particular instance, the complainant should have approached the government for redressal first before approaching the courts and the court should have ideally asked the platform to remove the “offending content” than ban the entire app.


According to IAMAI, dilution of the Safe Harbour protection available to intermediaries/social media platforms undermines the steady growth of India’s digital economy. This especially impacts the thriving startup ecosystem in the country.


“Content moderation on user-generated platforms is an industry-wide challenge that our members take very seriously, and are constantly addressing with ever-improving mechanisms along with enhanced safety features such as increased privacy settings, in-app reporting, comments filter, content filter for younger users, in-app access to Community Guidelines, online safety resources and more,” IAMAI said.



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Jet Airways CEO asks govt for Rs 175 crore to pay one-month salary to staff

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Jet Airways management has asked the government to release Rs 175 crore to pay one-month of salary to its staff. The airline also asked to retain prime airport slots to retain value for new investor.


A team of employee representatives led by CEO Vinay Dube and Deputy CEO Amit Agarwal later in the evening met Finance Minister Arun Jaitley and requested for Rs 175 crore, which would be used to pay one month salary to the employees.



“We requested for funds to pay at least one month’s salary and that will give hope to employees,” Jet Airways CEO Vinay Dube told Business Standard.


However, Jaitley did not promise anything and said that he would forward the request to banks.


Civil Aviation secretary Pradeep Singh Kharola was also a part of the team.


The airline shut operations on April 17 as banks refused to release emergency funding of Rs 400 crore.


The lenders consortium refused to release money as they felt they don’t have enough collateral to extend further credit.


Asim Valiani, Vice President, National Aviator’s Guild, who was part of the team, said that airline’s asset, like the Boeing 777 planes, can be kept as collateral to release the amount. ” With that one month salary can be paid to the employees,” Valiani said.


Jet Airways has defaulted on a loan of EXIM bank through which the aircraft were bought. This is the reason why Indian banks are unable to treat the planes as collateral.


Valiani said they also requested to protect prime airport slots of Jet Airways to give confidence to new investor that operations can be resumed immediately.


ALSO READ: Jet staff seek President’s intervention for salary dues, funds to airline


The government has started distributing Jet Airways slots temporarily to other airlines. Jet will have the right to retain these slots if it can resume operations in six months.


“Banks were unable to release emergency funds we had sought. But right now it’s important to pay the salary of the employees and protect airport slots to create value for the new investor and also for the banks,” Dube said.


Dube said that the bank’s had their own reasons and rules due to which they couldn’t release money.


“Banks have their own commitments and consideration when asked about why banks did not agree on release of loans earlier. Let’s focus on future and not on past, ” he said.


ALSO READ: Bankers weigh all options to save Jet Airways without getting hit


The employee members also asked to expedite the sale process. “We were told that there were serious bidders,” Dube said.


ALSO READ: Flew too high? Jet’s Goyal through the eyes of those who worked with him


SBI led consortium has called for bids for up to 75 per cent of the company. However, with the Supreme Court striking down a key circular which had allowed banks to convert the airline’s debt into equity, there is uncertainty how much of the stake can actually be sold.



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