India Morning Report: Why not a 50 bp cut now, and is Glenmark the new blue chip

Does Rao have room to cut rates

Yesterday’s hawkish review ahead of today’s policy meeting and announcement was very clear about the CAD reaching 5.3% with another reduction in the Central Bank’s conservative GDP pronouncement. However, inflationary pressures have ebbed and since the Central Bank realises the importance of doing away with the spectre of a recession, now hinging on a rate cut with Credit growth stuck at a low 15% despite the gap from Deposits that grew 11% in the week ending Dec 28.

That it does, also means that the rate could well be a good 50 bps, accelerating the dissemination of liquidity and growth from financial easing in the Economy and allowing RBI another breather to study inflation in detail over the period till June when the next rate cut would become due. one wonders though if like bank desks have forecast, India can actuall live to the top of this Economic cycle with only 100 basis points in cuts or even 150 bp till March 2014

Axis Bank Mega QIP garners $2 bln

Axis being the speculators’ pick for arbitrage and weightage balancing on both Nifty and Banknifty,    the effects of its improving fundamanetals with a large $1-1.5 bln Capital infusion are going to be important momentum providers to the Nifty and as it fortuitously looks like it will not result in Cats and Dogs moving up with both Educomp and Jubilant foods lying low ( the latter having lost its coin purely on speculative traders’ dime), it would mean longer term Capital taking over some of the remaining float at Axis Bank and others in thelarger Mid Cap categories like Yes Bank ( who have changing ownership on the FII ‘float’ as a downside risk after having Rabobank exit)

Glenmark Pharmaceuticals (Photo credit: Wikipedia)

Glenmark reports Q3 results on high expectations – ‘Enriching shareholders’

The deep pipeline at Glenmark with 46 ANDAs to go in the US market and 82 products already authorised its growth at double the industry rate fof 12% in the first nine months of 2012 ill only be exceeded by itself again in this quarter and lead to probably a count in the Top 10 pharma companies and even the Top 5 in the foreseeable future.

A healthy 25% of the portfolio seems to be domestic market driven and unlike other market observers we do not believe such 35% growth as it achieved in India in Q2 is likely to be beaten by others in the Industry depending on new compulsory licensing and expensive generics for the Indian market as portals for explosive growth

The domestic market remains likely to reward Diabetes solutions and normal OTC and low value prescription medicine manufacturers with volumes and growth from the current pathetic $2.5 B mark in 2011-12 

Glenmark pharm in the meantime is prescribed for having broken the barriers with consistent 20% Topline and 30% Net profit growth parameters.

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