Stock markets in India are trading at record highs today ahead of the expiry of July futures and options (F&O) contracts later in the day. Gains are largely seen in PSU stocks and bank stocks.
The BSE Sensex is trading up by 132 points and the NSE Nifty is trading up by 37 points. Meanwhile, the BSE Mid Cap index is trading up by 0.8% while, the BSE Small Cap index is trading up by 0.4%. The rupee is trading at 68.80 to the US$.
In news from the pharma sector. As per an article in a leading financial daily, Dr. Reddy's Laboratories has launched Hervycta (Trastuzumab), a biosimilar of Roche's Herceptin in India.
It is indicated for the treatment of HER2-positive cancers (early breast cancer, metastatic breast cancer and metastatic gastric cancer).
Dr. Reddy's Hervycta is available in strengths of 150mg and 440mg multiple dose vials.
Further, Dr. Reddy's currently has four biosimilar products commercialized in India and various emerging markets, and an active pipeline of several biosimilar products in the oncology and immunology space.
Speaking of the biosimilars, note that, Biosimilars and Biologics are burgeoning sectors. Also, major scientific and technological advances, coupled with socio-demographic changes and increasing demand for medicines will revive the pharma industry's fortunes in another 10 to 20 years. Herceptin (marketed as Herclon in India) and its biosimilars had India sales of around Rs 2.9 billion MAT for the most recent twelve months ending in December 2017 according to Ipsos.
But given the complexity of biologics, will Indian companies be able to break some ground in this space? Going forward, whether the monetization of biosimilars proves to be a big growth driver for the company will be the key thing to watch out for.
Meanwhile, The BSE Healthcare Index has been on a roller coaster ride in the past few years. The period from 2012 to 2015 saw the index go up more than three times.
The Roller Coaster Ride of the BSE Healthcare Index
Since then it has been a painful ride downwards.
Pre-2015, pharma companies enjoyed a fairytale ride in the US market. Low labor costs, good chemistry skills, along with efficiency, ensured Indian companies could copy innovator drugs to make generic drugs at a fast pace.
The generic business had lucrative margins for all major pharma players. But the party did not last long. In the quest to supply drugs quickly, they compromised on quality at their manufacturing facilities.
The regulatory issues coupled with price erosion in US markets has impacted the business of major pharma players.
At the time of writing, Dr. Reddy's share price was trading up by 1%.
Moving on to news from stocks in the engineering sector. Larsen & Toubro (L&T) has reported a rise of 63.3% in its net profit at Rs 9.1 billion for the quarter ended 30 June 2018 as compared to Rs 5.6 billion for the same quarter in the previous year.
Total income of the company increased by 8.5% at Rs 157.2 billion for Q1FY19 as compared Rs 144.9 billion for the corresponding quarter previous year.
On the consolidated basis, the company has reported a rise of 36.1% in its net profit at Rs 12.2 billion for the quarter under review as compared to Rs 8.9 billion for the same quarter in the previous year.
Total consolidated income of the company increased by 17.1% at Rs 285.3 billion for Q1FY19 as compared Rs 243.6 billion for the corresponding quarter previous year.
At the time of writing L&T share price was trading down by 1.7%.
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