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Pharmaceutical giant Aurobindo Pharma might have posted a strong January-March quarter with profits after tax surging 29.7% on-year basis and gross margins going up 2.9% from a year-ago period, but the stock has little steam left now after jumping over 159% since its March lows. Trading at Rs 761 per share on Friday morning, the stock has helped investors pocket mammoth gains even during a time when the overall equity market sentiment was weak globally. However, now the rally has almost reached its peak. While some brokerage firms are revising their calls, some retail their previous analysis but the target price set by all is almost close to where the stock price is now.

Aurobindo Pharma has been gradually treading up the complexity curve for sterile products, with a range of approvals, including colored products, PFS products, large volume lyophilized products, and complex API products. For sterile sales in the USA to reach US$400-500 million, analysts say the firm will need progress in other complex filings such as triamcinolone injectable, iron products, peptides, and depot injections. “ However, progress in these areas has been understandably slow, while its inhalation (pMDI’s as well as Advair, though none in clinics) and biosimilars (Avastin filing for the EU in 1QFY22) products are yet to be filed, with meaningful profit contribution unlikely before FY2024,” said analysts at Kotak Securities. The brokerage has downgraded the stock from ADD to REDUCE with a fair value of Rs 730.

Shares of Aurobindo Pharma after seeing a strong rally in the previous months are now among some of the stocks on the bourses that are positive year-to-date. The stock price is up 67% since the beginning of the year. Aurobindo Pharma also maintains a strong cash balance on account of anticipation of the Sandoz deal, which will be deployed back in business, according to the company. With strong focus on the future, management expects the firm to file 50-60 products over the coming few years. With this increase in R&D cost is also expected to shoot up.

“Over FY20–22E, Aurobindo Pharma’s R&D is likely to increase, EBITDA margin would remain flat, and earnings would rise at a 6% CAGR. With the OAI status at four facilities and a warning letter at a fifth one, execution risks persist.,” said Edelweiss Securities. The brokerage said the stock is trading at 15x FY22E earnings as it maintains the HOLD call with a target price of Rs 825 per share. Interestingly when foreign investors were leaving the Indian markets, FII investment in Aurobindo Pharma went from 21.4% at the end of December 2019 to 22.3% at the end of the March quarter. Although the stock has a BUY rating from Motilal Oswal the target price is at Rs 880 per share. The brokerage firm said it remains positive on Aurobindo Pharma on account of a robust ANDA pipeline, pending approval, as well as a niche product pipeline build-up for the developed markets.

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Saregama India share price was locked in a 20 per cent upper circuit at Rs 400.70 apiece on Thursday after the music and entertainment company announced a global deal with social media giant Facebook. Saregama will license its music for video and other social experiences across Facebook and Instagram. Saregama India shares have surged over 45 per cent since Monday’s close of Rs 275.25 per share. However, the stock has rallied over 116 per cent from its March low of Rs 185. The stock opened at Rs 368 and quoted day’s high of 400.70 and low of Rs 355 in the session so far. With this partnership, “millions of Facebook users will be able to add music from our vast catalogue to stories and videos they create and share,” said Vikram Mehra, Managing Director of Saregama India.

Despite this 45 per cent rally in just four days in the stock, Saregama India is still sitting nearly 45 per cent below its 52-week high. Under this new partnership, users will be able to add music to videos, stories via music stickers and other creative content. The company said that people will also be able to add songs to their Facebook Profile. “At Facebook, we believe music is an integral part of self-expression and bringing people closer together and creating memories that last,” Manish Chopra, Director and Head of Partnerships, Facebook India, said.

Formerly known as The Gramophone Company of India Ltd, Saregama owns the largest music archives in India. “We are very proud to partner with Saregama that will allow people on our platforms, globally, to use their favourite retro Indian music to further enrich their content on our platforms,” Manish Chopra added. With today’s rally in the stock, the market capitalisation of Saregama India stands at Rs 698.26 crore.

In a separate statement to BSE, Saregama India informed that the board of directors of movies and entertainment company is scheduled to meet on Friday, June 5, 2020, to consider and approve audited financial results of the company for the quarter and financial year ended March 31, 2020. It will also consider the recommendation of dividend for the financial year 2019-20, if any.

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Britannia Industries share price rallied over 7 per cent to hit a fresh 52-week high of Rs 3,704.55 in Wednesday’s trade as the bread and biscuit maker reported 26 per cent rise in consolidated net profit for the March quarter at Rs 375 crores. The company had clocked a profit at Rs 297.23 crore in the corresponding period of the previous fiscal year. Britannia Industries has hit a 52-week high for the second consecutive session today, surpassing the previous high of Rs 3,479.55. Britannia Industries stock price has surged 76 per cent from its March low of Rs 2,100.55 per share.

At 10.20 AM, Britannia Industries was trading 5.66 per cent higher at Rs 3,645.65 apiece on the BSE as compared to a 1.15 per cent rise in the S&P BSE Sensex.”There was an impact on sales during late-March, growth for Apr-May just about exploded at 20% and 28% respectively. This is difficult to explain, though there are many theories one can think of: pantry up-stocking (then how did May continue to grow at such a high rate?), increased consumption since most people are at home (what about the shortfall in out-of-home / on-the-go consumption?), feeding migrant workers, etc.,” JM Financial said in its latest research report.

Revenue of Britannia Industries increased by 2.9 per cent to Rs 2,946 crore as compared to Rs 2,861 crore last year. However, it declined by 3.3 per cent sequentially. The company said that lockdown has impacted its growth revival. “After 9 months of moderate growth, we started to see growths coming back in the first 2 months of this quarter which was then hit by COVID-19 and lockdown in March impacting the revenue & net profit growths by an estimated 7-10%,” said Varun Berry, Managing Director, Britannia Industries. In April this year, the company had announced an interim dividend of Rs 35 per share for the previous financial year.

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Billionaire banker Uday Kotak sold 2.83% of his holding in Kotak Mahindra Bank today, bringing his shareholding to 26.1% from 28.93%, closer to what was agreed with the Reserve Bank of India (RBI) earlier this year. Uday Kotak raised Rs 6,940 crore, by selling close to 5.5 crore shares at the upper price limit of Rs 1,240 per share, according to Bloomberg news. The stake dilution was carried out through a private placement by way of a block deal on June 2. Shares of Kotak Mahindra Bank surged over 7% on BSE Sensex on Tuesday morning to trade at Rs 1,330 per share.

The stake sale comes just a day after Kotak Mahindra Bank successfully raised Rs 7,442 crore by issuing 65 million shares of the lender at a discounted price of Rs 1,145 per share via a Qualified Institutional Placement (QIP). The QIP saw marquee investors such as Invesco Oppenheimer buy 52 lakh shares, followed by Canada Pension Plan Investment Board, picking up 46 lakh shares, and ICICI Prudential Mutual Fund getting hands-on close to 41 lakh shares. Uday Kotak’s decision to pare-off shareholding is in line with the approval granted by the Reserve Bank of India earlier this year.

In January, Kotak Mahindra Bank had informed the market regulator that the central bank had granted in-principle approval for an offer to cap promoters voting rights in the lender to 20% of paid-up voting equity share capital (PUVESC) until March 31, 2020. “Promoters’ voting rights in the Bank to be capped to 15% of PUVESC from April 1, 2020, onwards,” the bank had said in January.

Kotak Mahindra Bank was asked by the RBI to cut promoters shareholding to 20% of paid-up capital by December 31, 2018, and to cut it further to 15% by March 31, 2020. The lender followed-up with a proposal to cut promoter holding to 19.70%, which was rejected by the central bank. Kotak Mahindra Bank had challenged the RBI in relation to this matter in the Bombay High Court. RBI’s bank licensing rules ask private banks to pare promoter holdings to 40% within three years, 20% within the ten years, and 15% in 15 years. The court case was withdrawn by the bank in February.

Currently, Kotak Mahindra Bank shares have jumped 20% from March lows and is one of the most expensive bank stocks in the Indian equity market. The stock however has a hold rating from Emkay Global which highlighted that the QIP is likely to result in subdued Return on Equity. Motilal Oswal has a neutral rating on the stock.

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Yes Bank share price gained 4.2 per cent to Rs 28 apiece on BSE in Monday’s strong trade as the bank informed the bourses about the reclassification of shareholding after Madhu Kapur group has consented to be categorised as public stakeholders. From it’s March low of Rs 5.55, the stock has skyrocketed over 400 per cent. The Madhu Kapur group which includes Madhu Ashok Kapur, Shagun Kapur Gogia Gaurav Ashok Kapur and Mags Finvest Private Limited, agreed to give up their status as Yes Bank promoters and reclassify their shareholding in the bank as non-promoter shareholders or public shareholders, Yes Bank said in a BSE filing on Saturday.

Around 1.15 PM, Yes Bank shares were trading at Rs 27.25, with a gain of 1.30 per cent as compared to a 3.60 per cent rise in S&P BSE Sensex. The stock opened at Rs 27.75 and touched an intraday high and low of Rs 28 and Rs 27, respectively, in the session so far. The stock quoted a 52-week high of Rs 157 in May 2019. From May 29, the private lender will not be available for trading in Futures & Options (F&O) segment. Yes Bank co-founder Rana Kapoor is in police custody on the alleged charges of corruption and financial mismanagement.

Yes Bank was bailed out by the State Bank of India-led equity consortium formed with six other lenders with a capital infusion of Rs 10,000 crore. Besides, a private lender on Sunday announced to restructure the salaries for the senior leadership team under which 30 per cent of the total cost to company (CTC) will be moved to the variable pay category for the financial year 2020-21, according to a PTI report.

In another development, Yes Bank informed in BSE filing that the private lender has acquired a 24.19 per cent stake Dish TV India by invoking pledged shares. Dish TV had kept 44.53 per cent equity as collateral with the lender against loans. “Yes Bank has acquired 44,53,48,990 equity shares having nominal value of Rs 1 per share, constituting approximately 24.19 per cent of the post-issue paid-up share capital as at March 31, 2020, of a listed company, namely, Dish TV India Limited,” the lender said in a release.

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