Posted at 12:10 PM , on February 25, 2020
An elaborate report by CNN had clearly brought out that the Indian pharma industry could be the most vulnerable to the Chinese Coronavirus pandemic. It only magnified the already existing problems for the pharma sector in India.
Why China matters to pharma
Over the last 30 years, Indian pharma companies have become giants riding on the back of the generic drugs wave. Today, India produces nearly 20% of all drugs manufactured in the world by volumes. The big challenge is that India relies on China to supply nearly 70% of the raw materials for the manufacture of these drugs. Popularly known as active pharma ingredients (APIs), the factories to manufacture these APIs are largely based in the Hubel province of China. This region is one of the worst affected by the Coronavirus scare as the virus is expected to have originated there. Most factories in this region are shut and hence production is badly affected. Then there is the challenge of dwindling inventories. Most of the Indian pharma companies keep inventories up to 2 months with them. The production disruption has already crossed 1 month and most of the pharma companies are now worried that this could create a major supply chain problem for them. Companies like Cipla heavily depend on China for feeding their supply chain and the impact is evident on the stock price. Even alternate sources of APIs have an indirect dependence on China.
Posted at 11:17 AM , on January 27, 2020
No economist, policy maker or even CEO of an Indian company believes that the government would be able to hold 3.3% fiscal deficit in 2019-20. Some leeway is bound to be there in a year when outlays are growing and inflows have been tepid. But there are four key issues to tackle with the fiscal deficit.
Stay within the leeway
This year the government may not have much of a choice but to offer a counter cyclical approach to growth. It will have to give some leeway on the fiscal deficit front to propel growth but the question is how much? Ideally, the government should stick to the limits prescribed by the NK Singh Committee which permits a maximum deviation of 50 bps in an exceptional year. If the government can hold the fiscal deficit at less than 3.8%, it will be seen as a positive move. Continue reading
Posted at 6:15 PM , on October 12, 2015
What will drive markets from here on?
As the Nifty gets closer to the 8200 mark, the question is whether the rally has further legs from these levels? The answer can be quite tricky. Currently, there are quite a few key factors which need to be addressed before we can have a clear picture on where the markets are headed.
Posted at 7:45 PM , on August 10, 2015
India is becoming a very theme-specific investment story
For the last 7 years since the sub-prime crisis, the Indian market has been a macro play. The markets were driven more by global fund flows and news flows. How the US Fed set interest rates and managed liquidity became important. The crisis in Greece and therefore in Europe, became the staple diet for Indian market analysts. A lot of that could be quietly changing. Within sectors that are stretched, specific companies are making an effort to position themselves differently. And the results are showing in stock prices! But what are these specific themes? Continue reading