Sensex, Midcap trade higher; Cipla, Glenmark, Lupin jump


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The market remained higher for the fourth consecutive session today. The Sensex rose 106.78 points to 28911.88 and the Nifty climbed 42.25 points to 8753.80 led by metals, IT, auto, FMCG and select banks stocks.

The broader markets continued to outperform with the BSE Midcap and Smallcap indices rising 0.65 percent each. About 1251 shares have advanced, 723 shares declined, and 164 shares are unchanged.

While Kunj Bansal of Centrum Wealth Management expects overall positivity to remain in the market, he expects the upcoming Budget to be light. Therefore, in case the Budget is light because the government has already announced a lot of policy measures through the ordinance route. Then the market could be some correction post the event.

Cipla gained 2.5 percent despite Q3 numbers missed estimates and cutting FY15 growth guidance. Brokerages are positive on FY16 prospects of the company. Exports are expected to pick from Cipla supplying Nexium formulations to Teva with profits to start reflecting from Q1FY16. Bank of America Merrill Lynch retains buy rating on Cipla and expects 18 percent CAGR in sales and 200 basis points EBITDA expansion over FT15-17.

Similarly, Glenmark rallied nearly 4 percent as Q3 adjusted operating profit margin was around 21 percent after adjusting for the forex loss the company reported due to the ruble depreciation. The company in its conference call indicated the guidance is maintained as it is in constant currency terms and it expects US approvals to pick up now on.

BHEL slipped 3 percent after reporting disappointing numbers. JP Morgan maintains underweight rating on the stock with target price of Rs 200 per share and cut cut FT15 and FY16 EPS estimates by 27 percent and 13 percent while Credit Suisse maintains underperform with a target price of Rs 200/share as current valuation at 20 times FY17e EPS is expensive.

Lupin rose 4 percent as the RBI says FIIs can now invest up to 49 percent in company. As of December 2014 FIIs held 31.77 percent in the company.
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