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Biocon Q2 profit drops 18% but revenue inches up on biosimilars boost

by 5paisa Research Team 22/10/2021

Biopharmaceuticals company Biocon Ltd reported an 18% drop in its consolidated net profit for the second quarter, as a slowdown in sales of generic drugs offset the growth in its biosimilars business.

Net profit after exceptional items for the July-September period fell to Rs 138 crore from Rs 169 crore a year earlier. However, net profit before exceptional items rose 11% to Rs 188 crore.

Earnings before interest, tax, depreciation and amortization (EBITDA) jumped 35% to Rs 551 crore while the core EBITDA margin expanded to 33% from 32% from a year earlier.

Kiran Mazumdar-Shaw, executive chairperson at Biocon, said the exceptional item related to modification of the optionally convertible debentures of a private equity investment in unit Biocon Biologics Ltd and reversal of claims related to the government’s Service Exports from India Scheme.

Biocon’s consolidated revenue from operations inched up 5% to Rs 1,840 crore from Rs 1,750 crore, primarily driven by good performance of the research services unit Syngene International and biosimilars business Biocon Biologics. The biosimilars portfolio includes insulins, monoclonal antibodies and recombinant proteins across developed and emerging markets.

Biocon Q2: Other highlights

1) Pre-tax profit before exceptional items rises 27% to Rs 276 crore.

2) Revenue from generic APIs and generic formulations falls 12% to Rs 530 crore.

3) Pre-tax profit from generics business drops 28.5% to Rs 498 crore from Rs 697 crore.

4) Syngene Q2 revenue at Rs 610 crore, up 17% year-on-year.

5) Biocon Biologics Q2 revenue rises 10% to Rs 743 crore

6) Biocon Biologics Q2 EBITDA at Rs 303 crore, up 72% YoY

7) Biocon Biologics Q2 EBITDA margin at 38% and core EBITDA margin at 42%.

Biocon management commentary

Mazumdar-Shaw said Biocon Biologics made strategic moves in the last quarter that will drive future growth of its biosimilars business and deliver long-term value for its shareholders. The quarter also marked Biocon Biologics’ strategic entry into vaccines and the infectious diseases segment through partnerships with Serum Institute Life Sciences and Adagio Therapeutics.

“With the waning pandemic and improvements in supply chain conditions, I believe all three business segments, generics, biosimilars and research services, are well positioned for sustained growth in H2FY22,” she added.

Biocon CEO and MD Siddharth Mittal, said the generics business witnessed a muted performance for the quarter as it encountered continuing pricing pressure in the US for its formulations portfolio, and a slower than expected ramp up of demand for some key APIs.

“Operational and supply challenges in the earlier part of the quarter also impacted the performance of the API business. There was advance buying by customers in the corresponding period of the previous fiscal, apprehending COVID-19 related disruptions and is reflected in the year-on-year decrease in revenue,” he added.

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Trending Stock: Is Federal Bank all set to zoom?

Trending Stock: Is Federal Bank all set to zoom?
by 5paisa Research Team 22/10/2021

The Federal Bank gave a bullish pennant breakout, indicating trend continuation. Is it all set to zoom? Let’s find out.

The recovery in Bank Nifty can be well attributed to a few of the well-deserved banking stocks. The Federal Bank is one of them. From the lows in March 2020, the Bank Nifty surged almost 150%, whereas the Federal Bank has jumped almost 175%, outperforming Bank Nifty by 25%. It has given breakout from bullish pennant pattern indicating trend continuation.

A bullish pennant pattern is a continuation chart pattern, which is usually witnessed when a stock experiences a large upward movement, followed by a brief consolidation, before continuing its northward journey. Remember, in order to complete this pattern, the price needs to break out from the upper slope of the triangle with higher volumes.

Having said that, the stock was under pressure since October 2017. Last week the stock broke out this downtrend suggesting a trend reversal. Presently, the stock is trading at an important Fibonacci level of 61.8%. Breaching the same would further invite bullishness. However, there few important levels that you need to look for that is 108, 128 and 185. There might be a potential pullback from these levels.

Technical indicators such as the Relative Strength Index (RSI) is also supporting the stock’s northward journey. It is presently hovering around 68, whereas its 20-week Exponential Moving Average (EMA) is at 57. Moreover, if we look at Moving Average Convergence Divergence (MACD) then it is also supporting bullishness in this stock. MACD is in the positive territory, in fact it has also given positive crossover.

The price opened at 94.8, made a high of 98 and a low of 93.3 before closing at 96.55 on October 21, 2021.

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These penny stocks are locked in the upper circuit on Friday, October 22

These penny stocks are locked in the upper circuit on Friday, October 22
by 5paisa Research Team 22/10/2021

Several penny stocks are locked in the upper circuit on a day when Sensex is seen trading in green with realty stocks and banking stocks outperforming.

The markets have recovered in style on Friday with Bajaj Finserv leading the BSE Sensex gainers list after jumping higher by more than 3% on an intraday basis. Bajaj Finance and Bajaj Auto feature amongst the top BSE Sensex gainers on Friday on an intraday basis. HDFC Bank and Kotak Mahindra Bank are amongst the top-performing private banks on October 22. HDFC Bank is trading above 17000 levels comfortably.

BSE Smallcap index and Midcap index even though in green are seen underperforming the frontline indices on Friday on an intraday basis. BSE Realty index is the top-performing sectoral index along with BSE Bankex. BSE IPO index is up by more than 1%. The shares of Rail Vikas Nigam Ltd are soaring higher after the stock saw a breakout with huge volumes. 

Several penny stocks are trading with gains, with few of the penny stocks locked in the upper circuit.

Following is the list of penny stocks that are locked in the upper circuit on Friday, October 22

Sr No   

Stock   

LTP (Rs) 

Price gain (%) 

1  

Llyods Steels  

5.6  

4.67  

2  

Shriram EPC   

6.15  

4.24  

3  

Prakash Steel   

2.8  

3.7  

4  

Viji Finance   

2.5  

4.17  

5  

Ankit Metal Power   

3.6  

4.35  

6  

Gayatri Highways   

1.1  

4.76  

7  

Reliance Naval and Engineering   

3.15  

5  

8  

Indowind Energy   

9.95  

4.74  

9  

Indosolar  

3.35  

4.69  

10  

National Steel   

6.6  

4.76  

11  

Hotel Rugby   

3.5  

4.48  

12  

Zenith Birla   

1.05  

5  

13  

Continental Seeds 

9.7  

4.86  

14  

TV Vision   

2.7  

3.85  

15  

DCM Financial  

3.6  

4.35  

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Asian Paints: What does the historical drawdown indicate?

Asian Paints: What does the historical drawdown indicate?
by 5paisa Research Team 22/10/2021

Does this fall in Asian Paints share price present a good buying opportunity for long term investors? Read on to know more.

Asian Paints, one of the best compounder for investors came out with its second-quarter result recently and is down by almost 10% since in last five trading sessions. From its all-time high of Rs 3505 reached in September 2021, the stock is down by almost 16%. The reason for such a fall is a miss on the earnings front given the rise in material cost. It is highest in the last four decades according to the management.

Does this fall present a good buying opportunity for long term investors? To know this we did a historical analysis of the drawdown (A drawdown is a peak-to-trough decline of a share price during a specific period for an investment), of the share price of Asian Paints. The last time we saw such a fall was in the share price of Asian Paints was in February 2021, when it dropped by 20% soon after it recovered its losses.

The following table shows the top 5 drawdowns of Asian Paints since 2002.

Worst drawdown periods  

Net drawdown in %  

Peak date  

Valley date  

Recovery date  

Duration  

1  

44.14  

16-06-2008  

12-03-2009  

22-07-2009  

288  

2  

28.68  

13-10-2016  

21-12-2016  

01-09-2017  

232  

3  

27.44  

06-02-2006  

08-06-2006  

06-11-2006  

196  

4  

24.8  

18-07-2013  

28-08-2013  

22-10-2013  

69  

5  

23.89  

08-01-2008  

22-01-2008  

29-04-2008  

81  

The above table shows that the company’s share price has been quite resilient even in tough times. For example, during the great financial crisis, though the frontline indices fell by more than 50%, shares of Asian Paints fell by 44%. Even during the recent fall of March 2020, shares of the company fell by 20% compared to a 38% fall by the index.

Purely going by the historical analysis of Asian Paints share price, it seems that we will witness a very limited fall from here. It presents a good opportunity for long term investors.

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Low Priced Stocks: These stocks are locked in the upper circuit on Friday, October 22, 2021

Low Priced Stocks: These stocks are locked in the upper circuit on Friday, October 22, 2021.
by 5paisa Research Team 22/10/2021

The shares of low priced scrips viz, Balurghat Technologies, Mahalaxmi Rubtech Ltd, RVNL, Gokul Agro Resources Ltd, SDC Techmedia Ltd, Camex Ltd, Oriental Timex Ltd and Network People Services Technologies are trading with price volume breakout on Friday on an intraday basis.

The BSE Sensex is attempting to regain its mojo back on Friday after gaining more than 300 points on an intraday basis.

The broader markets are seen underperforming the frontline indices while the real estate stocks and the banking majors are seen catching investors attention. BSE Realty index is up by 2% on Friday on an intraday basis. Brigade Enterprises is the top BSE Realty index gainer, up by more than 4% on an intraday basis while Oberoi Realty is up by more than 3%.

IB Real Estate and Prestige Estates are up by more than 2% each while Sunteck Realty, DLF and Godrej Properties are up by more than 1% each on an intraday basis in Friday's trading session. BSE Bankex is up by 1% with RBL Bank being the top gainer of the BSE Bankex. Kotak Mahindra Bank and HDFC Bank are up by 0.88% each. 

Several low-priced stocks or stocks below Rs 100 per share are seen trading with gains on Friday with a few of them locking themselves in the upper circuit.

Here is the list of low priced stocks that are locked in the upper circuit on Friday:

Sr No   

Stock  

LTP (Rs) 

Price Gain (%)  

1  

Rohit Ferro Tech   

14.1  

4.83  

2  

Digjam   

20.9  

4.76  

3  

Tilak Nagar Industries   

54.1  

4.95  

4  

Karda Construction   

21.2  

4.95  

5  

Twenty first century   

49.35  

1.96  

6  

Lyka Labs   

98.15  

4.97  

7  

Gokul Agro Resources   

47.55  

9.94  

8  

Arihant Foundation  

48.55  

9.97  

9  

Univastu India   

61.95  

19.94  

10  

Axiscades Engineering   

87.2  

5  

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IEX posts 75% jump in Q2 profit, offers bonus issue after four-fold surge in shares

by 5paisa Research Team 22/10/2021

Indian Energy Exchange Ltd (IEX) has been red-hot on the Indian bourses this year, and is likely to remain in demand even in coming months thanks to its strong financial performance.

The company reported a 75% surge in consolidated net profit for the second quarter through September to Rs 77.4 crore from Rs 44.34 crore a year earlier. Total revenue climbed 55% to Rs 122.3 crore from Rs 78.7 crore.

The company has been buoyed by rising energy prices as India’s economy begins to re-open and go full throttle, following two devastating waves of the deadly coronavirus pandemic.

IEX also announced a two-for-one bonus issue of shares, further boosting investor sentiment.

The strong quarterly performance and the bonus issue sent its stock soaring by the maximum daily of 10% in opening trade on Friday to Rs 832 apiece on the BSE. The shares subsequently eased off from the highs.

Still, shares of IEX have soared more than four-fold from Rs 181 apiece in November last year. In fact, the stock had touched a high of Rs 956 apiece three days ago in anticipation of the bonus issue.

Analysts say the bonus issue will infuse further liquidity into the stock. Some like Sonam Srivastava, founder of Wright Research, recommend that investors can buy IEX shares even at these levels. This is because IEX controls 95% of the energy exchange market in India and will continue to have a dominant position for the foreseeable future.

Some other analysts, however, feel that the valuations are stretched and that there could be a phase of consolidation going forward.

IEX Q2: Other highlights

1) Standalone net profit surged 69% to Rs 78 crore from Rs 46 crore in the corresponding period last year. 

2) Costs remained largely constant at Rs 17.97 crore as against Rs 17.8 crore in the year-ago quarter.

3) EBITDA in Q2 was Rs 106.97 crore, up 69.15% from Rs 63.24 crore a year earlier.

4) EPS increased to Rs 2.60 in July-September 2021 from Rs 1.49 in the same period last year.

5) Electricity volume traded on the IEX jumped 57.6% to 25.97 billion units.

IEX outlook

IEX said growth in electricity volume was driven by a substantial increase in power consumption as well as the preference by distribution utilities to meet their short-term requirements through its trading platform.

The Real-Time Market remained one of the fastest-growing electricity market segments on the exchange, achieving a growth of 125% with 5.3 billion units traded during the quarter, IEX said. The RTM contributed 20% to the overall volumes during the quarter, it added.

As things stand, IEX will likely continue to see good times ahead. The company is debt free and has investments of the order of Rs 700 crore, which it can bank upon in case it needs to, in future. 

After an apex court ruling, settling disputes between the Securities and Exchange Board of India and the Central Electricity Regulatory Commission, electricity can now be traded as forward contracts and derivatives on the exchanges, just like any other commodity. This directly benefits IEX as it can it can get into longer-duration delivery- based contracts on its platform, adding to its volume and increasing the range of its products. 

Moreover, the shift of buying pattern from long-term power purchase agreements to the short-term market is expected to increase its volume.

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