Glaxo, Cipla Seen as Biggest Losers as India Sets Prices

GlaxoSmithKline Plc and Cipla Ltd. may have the most to lose from a new policy in India that would limit the retail prices of drugs that generate 23 percent of the pharmaceutical industry's revenue.

Price caps will be widened to include 348 drugs such as antibiotics, anti-hypertensives and cancer medicines, Srikant Jena, junior minister for chemicals and fertilizers, said yesterday in New Delhi.

India's pharmaceutical market is mostly composed of so- called branded generics, where often dozens of companies are selling the same drug under different brand names. There is a wide variation among the prices of these brands, and Indian units of multinational drug companies Glaxo and Abbott Laboratories (ABT) may be the biggest losers of the new policy because their products are often priced at the top end of the range, said Bino Pathiparampil, an analyst at IIFL Ltd.

"The biggest impact will be for the multinationals because their products are often the most expensive," Pathiparampil said by telephone from Mumbai. "Indian players have a wide variety of other generic products which are outside price control, so they'll be less affected."

Under the new policy, every drug in the National List of Essential Medicines will be capped at the weighted average price of all brands with a market share exceeding 1 percent, Jena said. That's different from the existing system, which covers 74 drugs and sets a cap based on the product's manufacturing costs.

Antibiotics, Multivitamins

The list, formulated by the health ministry, includes 64 antibiotics, 27 cardiovascular treatments, and 24 hormonal drugs, in addition to multivitamins and pain relievers.

The Indian unit of London-based Glaxo gets about 31 percent of its sales from drugs included in the list, making it the publicly traded company with the largest exposure, Barclays Plc said in a Sept. 24 report. Among Indian drugmakers, Mumbai-based Cipla would face the biggest loss in revenue, with 28 percent of sales coming under price control, analysts Balaji Prasad and Rohit Goel wrote.

"We are still analyzing the policy internally and cannot comment on the impact on sales," Cipla Executive Director S. Radhakrishnan said in a phone interview. Glaxo spokeswoman Rupali Kalav didn't reply to an e-mail and a phone call after office hours.

India has 92,000 brand names of registered pharmaceuticals, according to a compendium of medicines sold in the country. The World Health Organization, in contrast, recommends 340 essential drugs.

90 Percent

About 90 percent of prescriptions are generics, which their manufacturers seek to differentiate with unique names. Glaxo's Augmentin, a combination drug containing two antibiotics, is sold by Ranbaxy Laboratories Ltd. as Moxclav, by Cipla as Advent and by Mankind Pharma Ltd. as Moxikind-CV.

Prices of the brands can differ by as much as 75 percent for six tablets, according to the drug encyclopedia CIMS.

When prescribing medication, Indian doctors typically refer to brands rather than chemical names. Pharmacists are prohibited from substituting one generic for another, even if it's cheaper, so drugmakers try to persuade doctors to think of their brands first.

"The new proposal will have an impact on industry as the span of price controls will now increase to cover around 30 percent of the pharmaceutical market," Ranjit Shahani, managing director of Basel, Switzerland-based Novartis AG's Indian unit and the president of a pharmaceutical lobby group, said in an e- mailed statement.

All the major pharmaceutical companies in the country derive from 30 to 40 percent of their sales from exports and that would shield them from this policy change, IIFL's Pathiparampil said.

Sun Pharmaceutical Industries Ltd., the country's biggest drugmaker by market value, got 37 percent of sales from India last fiscal year. Lupin Ltd., the world's biggest maker of tuberculosis drugs, got 27 percent from its home country.

The company is still "awaiting more clarity" from the government on the new policy recommendations, Mumbai-based Lupin said in an e-mailed statement.

To contact the reporter on this story: Adi Narayan in Mumbai at anarayan8@bloomberg.net

Consumers want discount for generic medicines - survey

Having access to care and treatment for your medical needs is possible with a private health insuranceplan, but a new survey has found that 75 per cent of Australians believe that a price discount should be offered by the government for those who choose to buy generic medicines.

The research surveyed more than 1,000 respondents across Australia, finding that may Australians were "very positive" about generic medicines, with 89 per cent rating generic prescription medicines as 'a product I know and trust'.

The research was commissioned by Generic Medicines Industry Association (GMiA) also found that 84 per cent will trust their doctor and 86 per cent their pharmacist to aid them in choosing which medicine to buy.

Chairman of the GMiA Dr Martin Cross said that the findings in the research should frame future policy decision making.

"Consumers are not incentivised to opt for generic medicine on most occasions. GMiA advocates that consumers who are struggling financially the most (concession card holders and consumers who purchase prescription medicines frequently) could do with access to more affordable medicines," said Dr Cross.

Applying for NEW WHO GMP Certificate online

You can apply for new WHO GMP Certificate 60 days prior to expiry of already granted WHO GMP Certificate or can make an application for WHO GMP Certificate for the first time. Please ensure that you have entered the licence, approved product details correctly and completely.

1.       Go to "New Application" and Select and click on "WHO-GMP Application". New screen will open.

2.       Again click on "New Application". Select certificate type from the drop down list given of Certificate type.

3.       If application is for fresh WHO GMP Certificate with annexure, then list of products will appear. The product can be selected for which the said certificate is required.

4.       Upload the pdf file of the site master file. For a application by a LOAN Licensee, Upload PDF of Technical agreement between applicant and the OWN licensee and Undertaking of OWN licensee. (Draft formats can be downloaded)

5.       Read the undertaking and declaration. If agreed then only you can proceed further with the application.

6.       Click on "Proceed". Your application is ready for submission and for further payment of fee.

7.       You can preview the draft copy of WHO GMP Certificate which may be issued. This can be previewed for verifying the details. If anything has to be corrected, it can be done here itself, by deleting the application and redrafting (preparing).

8.       For making Payment click on "+". The amount will be calculated by the system as per the fee structure notified by FDA and amount will be displayed. You have two options for paying the displayed fees for the application.

a.       Deposit at FDA office convenient to you. If the manufacturer selects to pay by cash or DD at convenient FDA office, select "Deposit at FDA office. You can select the convenient FDA office from the drop down list of the FDA offices. Then Click on "Generate Challan" to generate challan in duplicate to be submitted to the selected FDA office. Pay the fees at the Selected FDA office. Obtain receipt.

b.         Online Payment through Net Banking: You can pay the fee by internet banking only. Select "Online Payment". Again click on "Online Payment" tab. New window will take you to "Government Receipt Accounting System". Click "Pay Without Registration".New screen will open. Select Department from drop down "FOOD AND DRUG ADMINISTRATION". Select Payment type from drop down as "DRUG MANUFACTURING CERTIFICATE". Select District from drop down as "MUMBAI". Select Office Name from drop down as "COMMISSIONER FOOD DRUG ADMIN". Keep Period (Year) as "2012-2013". Then select "ONE TIME/ ADHOC" from the drop down besides "period". Then select Form ID from drop down as "WHO GMP Certificate" or "COPP" or "SLSPP", as the case may be. Enter amount to be paid. Enter the details as asked in the right block. Then select the bank through which you will be paying. At present the banks through which you can pay are – State Bank of India, State Bank of Hyderabad, Union Bank of India, Indian Overseas Bank, IDBI Bank, Dena Bank, Punjab National Bank, Bank of India, Bank of Baroda, Bank of Maharashtra, Canara Bank only. Submit for payment.

 9.       After making payment Click on "PAY & CONFIRM". New window will open.enter the details of payment made such as Receipt no / GRN No., date of payment. Upload the pdf copy of the receipt obtained from FDA office (Both sides of receipt) or generated by online payment.

10.    Agree with the responsibility statement and then confirm the application by clicking on "CONFIRM". Now your application has been freezed and submitted to the FDA office.

11.    Status of the application can be viewed by logging in and going to the new application.

Maharashtra FDA starts online WHO-GMP certification system for manufacturers

As part of its plan to introduce e-governance, the Maharashtra Food and Drugs Administration (FDA) has launched online WHO-GMP certification system for all the manufacturers across the state. The aim of this online system is to issue WHO-GMP certificates faster to all the manufacturers including loan licensees.

The main features of online WHO-GMP certification system for manufacturers will help in saving their time as they will be able to apply online for all the products they manufacture. They can receive certificates faster and has user friendly features.

Maharashtra FDA commisioner Mahesh Zagade said, "Since August 16, 2012 we have stopped taking any applications manually and we have asked all the applicants to submit their applications only through online system." Zagade further added that it is required for all the manufacturers to add the details of the products approved, under the respective licence granted (Form 25 or Form 28, etc). This is necessary while making an application for WHO GMP Certificate or COPP.

Zagade informed that if the applicant wants to apply for new WHO GMP Certificate he should apply within 60 days prior to expiry of already granted WHO GMP Certificate or he can make an application for WHO GMP Certificate for the first time. But he must provide license, approved product details correctly and completely. All the WHO-GMP certificate holders (including loan licensees) should register online and upload all data regarding their products.

FDA has assigned O Sadhwani, Joint Commissioner (Law), FDA, Mumbai to issue certificates: WHO-GMP certificates and Certificate of Pharmaceutical Product(s) to the manufacturers on their request. The validity of COPPs certificates shall be two years from the date of grant of the certificate.

According to the current data, Maharashtra FDA has registered 69 manufacturers (own licensee) and 35 loan licensee holders. Sources from the FDA said, "The manufacturers across Maharashtra are applying online and number is increasing tremendously."

For issuing WHO-GMP certificates, the FDA is charging a fixed sum of money. For fresh WHO-GMP Certificate – Inspection fee (Own) Rs.5000 will be charged for each section, for fresh WHO-GMP Certificate - Inspection fee (Loan) Rs.2000 for each section, for unit WHO-GMP Certificate Rs.1000 for every 10 products, for new COPP with Annexure (with Validation & Stability) Rs.1500, for new COPP without annexure (with Validation & Stability)Rs.1000, for COPP with any type of Annexure Rs.1000, and for COPP without annexure Rs.500.

Linux and Windows: Peaceful Coexistence

One of the stumbling blocks in migrating to the Linux desktop is the mistaken view that you can't take it with you. Your data must remain captive to the Microsoft operating system. Not true at all.

A related misconception that stalls many Windows users from adopting the Linux OS is the belief that when you buy a new computer or install Linux to an existing computer, you must give up one operating system for the other. Again, not true at all.

Like an evangelist, I frequently tell people about a free Windows-like alternative that is faster and more secure than Microsoft's OS. The most common response I get is, "Linux, what's that?"

Often I also hear, "I can't switch systems. I am too busy to start from scratch with all my files." Or, "I'm too busy to go back and forth between two sets of files, one on my Windows computer and the other in my new Linux set up."

But you do not have to suffer either of those inconveniences to migrate to Linux. You can eliminate keeping duplicate files in both operating systems or the need to choose one OS over the other.

The solution is to install the Linux OS as a dual boot on the existing computer and continue to store and access all of your data on the Windows side of the hard drive. This lets you learn Linux in stages as you wean yourself from Microsoft Windows.

This approach works well on home computers and at worker's desks in an office setting. Using cross-platform applications when running the Windows OS makes switching to Linux even more painless.

For example, OpenOffice and LibreOffice are free clones of the Microsoft Office Suite. So you can save and read Word, Excel and PowerPoint files in the same look-alike apps in both Windows and Linux. Plus, Linux has a complete array of text editors and apps to view, create and save your existing and new movie, music and photo files that are compatible in Windows.

Two For One

This strategy works whether you apply it to a new off-the-shelf computer purchase or an existing older Windows PC. Whether desktop or laptop, you get two operating system choices for the cost of one computer. Remember that you pay for the Windows OS in the price of the computer. You also pay for upgrades to newer Windows releases and much of the software you run on Windows. The Linux OS is always free, even new releases. And Linux runs Open Source software, which is also free, so you always have a huge arsenal of great applications to meet your every need.

Whether you buy a Windows PC off the shelf or use your existing aging hardware, install a Linux distro in a separate partition on the hard drive yourself. The Linux installer will automatically create a dual boot GRUB startup screen. Turn on the computer -- or restart it -- to see the selection window. It's that simple!

Since the Linux OS is free, why not have both available even if you never need to boot into Windows? Newer computers will run any version of Linux faster than it runs Microsoft Windows. Some Linux distros specialize in running well on legacy gear.

Windows Plus Linux

Having two operating systems on one computer hurts nothing. Today's hard drives have more than enough storage capacity to handle all of the files from both systems and then some.

Some Linux versions, such as Damn Small Linux and Puppy Linux, run on low-powered older computers. Most Linux distros run from a CD or DVD in a live session without making any changes to the hard drive.

The trick is to access your data whether you run Windows or Linux. You could solve this problem by storing your data in the cloud or on a USB drive. Read on to learn how to keep your files in one location without maintaining duplicate sets of files for Windows and for Linux.

Installing Linux to run on the same computer that runs the Windows OS is not difficult to do, even for novice users. In fact, Linux installation disks automate the process for you.

GRUB Me an OS

When you set up your computer to run multiple operating systems from one hard drive, the start up process involves dualbooting. To do this, you must partition the hard drive.

The Linux installation process does all of the heavy lifting for you. It shrinks the large Windows partition into a smaller one. It creates a new partition and installs the Linux distribution you selected.

Most Linux installation disks include a process that installs GRUB, the Grand Unified Bootloader. GRUB lets you preselect the default OS to run if you do not make a selection in the allotted time.

Windows Is Antisocial

The Windows OS does not recognize the existence of other operating systems. Windows does not provide any way for you to access your other operating systems or files installed alongside it on the hard drive.

But Linux makes up for that Windows personality complex. Nearly all Linux distros recognize Windows on a hard drive. Knowing that Linux sees the Windows partition even when Windows does not reciprocate lets you store all of your documents, videos, music and whatever just where you would put them when using the Windows OS.

This lets you access everything when you run the Linux OS. It eliminates wasted storage space from having duplicate files on two partitions. It also eliminates the troubles associates with not opening the most recent document if you alternate between Windows and Linux often.

The soon-to-be-released Windows 8 OS makes an even more compelling case for migrating to Linux and keeping Windows 7 available in reserve, at least until you work in Linux full time. Windows 8, thanks to Microsoft's pressure tactics against PC makers, will have a mechanism that blocks any other OS from booting.

Finding Your Files

There is only one really tricky part in storing your files on the Windows partition. You must find where your Windows files are located and how to see them using the Linux file directories.

Finding your file storage location is largely a function of how the desktop environment of the distro you use displays the storage locations. For example, you might see icons on the desktop itself showing the Windows and the Linux volumes of the hard drive. Your system might display icons for each volume as well as icons for each plugged in USB drive.

Or your system may not place drive icons on the desktop. But it will let you select all available storage devices as part of the Nautilus or Dolphin or other Linux file manager apps.

Click on the various icons and file manager entries to find where the Windows partition of the hard drive is displayed. You will know you found the right location when you see folders labeled: Program Files, Program Files (x86) and Documents and Settings. The Linux OS does not use these types of folders. Most file manager apps let you bookmark locations for easy return visits.

Getting There

Unlike Microsoft Windows, Linux does not designate hard drive contents with letters (C:, D:. E:, etc.) Instead, Linux uses word labels or a multi-digit numbers for each storage device. The K Desktop Environment, for example, labels the Windows volume after the name of the computer maker in the Devices section of the file listing. It shows The Linux portion as Home in the Computer file listing.

Once you find the volume designation for the Windows OS file side of the hard drive, click on the Documents and Settings folder. Then drill down to the User folder. It will show whatever name you set up when you first ran the Windows OS. Click on this folder to open its content listing.

Now you will see all of the folders that the Windows menu and the Windows File Manager displays when you run that OS. You can click on the various folders that hold your stored data: My Documents, My Pictures, Downloads, Videos, etc.

You can bookmark each of these sub folders in the Linux file manager app or just bookmark the main Windows location. Some Linux distros let you place shortcuts to locations right on the desktop. Then you merely point the file picker dialog box to the appropriate area when you want to open a file in your Linux applications. You can also create new documents and save them to the same Windows OS location.

Safer and Better

Most computer users see a choice between hardware that runs either Apple's or Microsoft's operating system. They usually settle for what they learned to use in school or at work or at home. They are surprised to find out that a third choice -- Linux -- is free and easy to use.

Linux is a mature,stable and reliable operating system. It needs no resource-hogging anti-virus and anti-maleware applications to bog down the computer's performance.

Dual booting into Windows or Linux is easy to set up. Storing all your data files in one place accessible to both OSes makes migrating to Linux a no-brainer.

HMT sets up counter at Dehradun to reach out to people

In an effort to increase the market visibility of its products, HMT Watches Ltd today launched its programme of setting up counters at prominent post offices in Uttarakhand, beginning with the General Post Office in the city.

HMT wrist watches will be sold at the counter by India Post personnel as part of an arrangement with the company trying to revive itself in the face of tough competition from watch manufacturing giants like Titan.

"We are staging a comeback and such counters at post offices, which have a huge network across the country, will help us reach out to people and increase our market visibility," S Paulraj, Managing Director of HMT Watches Ltd said.

He was speaking to reporters after inaugurating the counter at the GPO here jointly with Chief Post Master General (Uttarakhand Circle) M S Ramanujan.

Beginning with Dehradun GPO, HMT counters will also be set up at other main branches of the state  in a phased manner, he said.

Paulraj said Uttarakhand was the seventh state where the programme has been launched after Tamil Nadu, Karnataka, West Bengal, Orissa, Assam and Chhattisgarh.

"India Post with its one lakh fifteen thousand branches across India can help us in a huge way to enhance visibility of our products," Paulraj said.

Many new modern designs have been launched at special prices to attract buyers, he said.

Though admitting that the HMT is still in the red, the company CMD said it is gradually making a comeback through such endeavours.

"We registered a growth of 27 per cent last fiscal and have recorded a growth of 36 per in the first quarter this year which we hope to maintain. It is a good sign, we may still be in the red but we are definitely coming back," Paulraj said.

When asked how India Post was going to benefit from the exercise, the CMD said it will be paid a commission at the rate of 15 per cent.

Registration mandatory for sale of 15 electronic items

T

o ensure safety standards, the government has made registration mandatory for 15 electronic products, including video games, laptops and microwave ovens.

"The Department of Electronics and IT (DeitY) has issued the Electronics and Information Technology Goods (Requirements for Compulsory Registration) Order, 2012, bringing into force a scheme for mandatory regime of registration of identified 15 electronic products so that these products meet specified safety standards," said an official statement.

The list of electronics products include video games, laptop/notebook/tablet, Plasma/LCD/LED televisions, microwave ovens, printers and scanners, telephone answering machines, electronic musical systems etc.

As against licensing, the scheme provides for self-registration of specified electronic goods.

"The scheme provides that no person shall by himself or through any person on his behalf manufacture or store for sale, import, sell or distribute specified electronic goods which do not conform to the specified standard and do not bear the words "Self declaration conforming to IS (Indian
Standard) on such goods after obtaining registration from the BIS," the statement said.

"Substandard or defective goods which do not conform to the specified standard will be deformed beyond use by the manufacturer and disposed of as scrap," it added.

However, the order does not apply to electronic goods meant for export.

The scheme also provides that the electronic goods having different sizes, ratings, varieties etc, such goods shall be grouped and may be granted series approval for a series of products based on testing of representative models.

DeitY will approve such series of products. This will obviate the need for every single model of the same series to be registered, the statement said.

The scheme also provides for DeitY and the BIS to randomly select samples of registered electronic goods to ascertain whether these goods conform to the Specified Standard.

The electronic goods have to be tested by a BIS approved testing laboratories.

The order will come will come into effect from March 7.

IT sees fall in use of commercial office space in Chennai

Due to the uncertain global market conditions, the Information Technology sector has witnessed a decline on the use of commercial office space in Chennai, says a study.

"Chennai office market is predominantly covered by the IT and IT-enabled services sector. In the first quarter of 2011-12, out of the total 1.20 million square foot absorbed, 75 per cent was contributed from the IT and ITeS sector", a study conducted by Knight Frank India said.

"However, in the first quarter of this financial year, share of IT and ITeS sector declined to 48 per cent due to the uncertain global market conditions," it said.

Sectors like media, telecom, aviation, automobile and consulting firms together contributed about 13 per cent in first quarter of 2011-12 to 22 per cent in first quarter of this financial year indicating the emergence of other sectors absorbing the commercial space market, it said.

On the outlook for this financial year, the study said the Chennai commercial property space has moved from an absolutely IT and ITeS sector, to a more diversified occupier base with the newer sectors. The banking, finance and services industry (BFSI) vertical also strengthened its hold in the commercial space with its share increasing from six per cent in the first quarter of 2011-12 to eight per cent in the first quarter of this financial year, the study said.

Current quarter will be better than previous one: MindTree

Manufacturing and BFSI are doing well.

Rostow Ravanan

CFO

MindTree

In an interview to CNBC-TV18, Rostow Ravanan, chief financial officer of MindTree  says the current quarter will see better growth than the previous quarter.

Below is the edited transcript of his interview with CNBC-TV18's Latha Venkatesh and Ekta Batra.

Q: How are you seeing business? How do you see the volume of business in Q3 compared to Q2 and in Q2 compared to Q1? Will you see an incremental growth or do you see atleast maintenance of the rate of growth?

A: The current quarter will see better growth than the previous quarter. That is broadly the commentary we gave in July, when we announced the results for the June quarter. So far, things are panning out as per that estimate.

Q: Can you give us a sense of incremental order inflow at this point in time with regards to your key verticals manufacturing and BFSI? What is the deal pipeline looking like?

A: Manufacturing and BFSI are two of our largest verticals. Both verticals have had a sequential growth of upwards of 4% in Q1. Similar sort of momentum continues for both of those verticals even now. We have had some decent wins in both the verticals recently and those wins are ramping up our schedule. So, both those verticals are doing well for us even as of today.

Q: Do you see any pressure on billing at all?

A: As of now, no. Even in Q1, we had a marginal increase in pricing, even after adjusting for cross currency impact. Within all our existing customers right now as well as new opportunities, which we are bidding for, currently, we are not seeing any pricing pressure.

Q: How would you be placed in terms of your FY13 guidance then? In the previous quarter, you did mention that the global environment continues to be challenging, there were delays in decision making, but you aren't seeing any budget cuts by clients as of now. How is the scenario panning out in this quarter? What are you touted to complete FY13 by?

A: For the full year, we changed our position between April and July. In April, we said we will be higher than industry estimates and in July we reduced it marginally. We said we will be in line with industry estimates. That is broadly what we are tracking even as of now.

Tech Mahindra acquires 51% stake in Comviva for Rs 260 cr

Software services provider Tech Mahindra  today announced acquisition of 51% stake in mobile value added services providers Comviva, in which Bharti Group has a major stake, for Rs 260 crore.

Post the acquisition, which is subject to regulatory approval, the new entity will be called Mahindra Comviva.

Tech Mahindra said Bharti Group is a majority shareholder in Gurgaon-based Comviva but declined to give details of its current and post-acquisition holding. The current promoters will continue to hold 20% stake on fully-diluted basis post the deal closure, the company said.

"This acquisition is a significant step forward in our vision of being a complete and comprehensive partner to our clients and like always we are confident of making this a successful venture for our stakeholders," Tech Mahindra Executive Vice-Chairman Vineet Nayyar said.

As a part of the deal, Tech Mahindra will make an upfront payment of Rs 125 crore, while the balance Rs 135 crore will be paid out over a period of five years based on Gurgaon-based Comviva achieving mutually agreed performance target.

This is the second acquisition by Tech Mahindra this month. Recently, it acquired Hutchison Global Services (HGS), call centre arm of Hutch, for USD 87.1 million (Rs 484.03 crore).

According to sources, the three private equity investors -- WestBridge Capital, Sequoia Capital India, Cisco Systems -- are selling their entire stake to Tech Mahindra, while Bharti Group is selling a part of its holding in Comviva.

Shares of Tech Mahindra today closed at Rs 903.45, down 0.69% from their previous close.

CRISIL revises Omnitech Infosolutions` fair value to Rs 182

CRISIL Research has come out with its report on Omnitech Infosolutions  . According to the research firm, company's revenues from Europe grew by 44% q-o-q due to fresh orders, which was offset by a decrease of 54% q-o-q and 43% q-o-q in Middle East and US revenues, respectively. Overall, overseas revenues decreased by 2% to Rs 301 mn.

Omnitech Infosolutions Ltd's (Omnitech's) Q1FY13 results were below CRISIL Research's expectations. Total revenues decreased by 2.9% q-o-q to Rs 1,280 mn due to lower revenue growth in India and overseas. Decline in cost of goods sold as a percentage of sales coupled with decrease in other expenses improved EBITDA margin by 299 bps q-o-q to 22.2%. Cost of goods sold as a percentage of sales fell to 55% in Q1FY13 from 57.3% in the previous quarter following lower mix of the low-margin systems integration business. Depreciation increased by 53% y-o-y due to capex of Rs 1.1 bn incurred in FY12 for technology upgradation at the Maphe center. Other income increased by 89% q-o-q as the company booked forex gain this quarter. The company reported a profit of Rs 60 mn compared to a loss of Rs 26 mn in the previous quarter because of lower tax outgo. It booked deferred tax liability for FY12 in the previous quarter, which was not present in this quarter. Consequently, adjusted PAT margin improved to 4.5%. Adjusted EPS was Rs 3.9. We maintain our fundamental grade of 3/5, indicating that its fundamentals are good relative to other listed securities in India.

Good performance in Europe offset by decline in the US and Middle East revenues:
Omnitech's domestic business contracted by 4.4% q-o-q to Rs 979 mn as the company is facing pressure due to increased competition at home. Revenues from Europe grew by 44% q-o-q due to fresh orders, which was offset by a decrease of 54% q-o-q and 43% q-o-q in Middle East and US revenues, respectively. Overall, overseas revenues decreased by 2% to Rs 301 mn. The company has shifted its focus more towards India, Europe and Asia Pacific from the US and Middle East businesses.

Subsidiaries continue to be in red:
Omnitech's Asia Pacific subsidiary and Avensus continued to report losses at the EBITDA level of Rs 10 mn each in Q1FY13. Management expects both to break even in Q3FY13. Avensus' profitability is expected to improve as the company will initiate increased offshoring. The company currently offshores 5-7% of Avensus' business. The Asia Pacific subsidiary has received a new order worth Rs 550 mn for FY13, which is expected to increase its margins going forward.

Earnings estimates and fair value revised downwards
We continue to use the discounted cash flow method to value Omnitech and have revised our earnings estimates downwards for FY13 and FY14 by 17% and 18%, respectively. The revision has factored in a delay in breakeven of Avensus and the Asia Pacific subsidiary, along with higher interest cost due to increased working capital requirement for the subsidiaries. Hence, our fair value is revised to Rs 182 per share from Rs 199. At the current market price of Rs 112, our valuation grade is 5/5.

Disclaimer: This report (Report) has been commissioned by the Company/Investor/Exchange and prepared by CRISIL. The report is based on data publicly available or from sources considered reliable by CRISIL (Data). However, CRISIL does not guarantee the accuracy, adequacy or completeness of the Data / Report and is not responsible for any errors or omissions or for the results obtained from the use of Data / Report. Opinions expressed herein are CRISIL's opinions as on the date of this Report.  The Data / Report are subject to change without any prior notice. Nothing in this Report constitutes investment, legal, accounting or tax advice or any solicitation, whatsoever. The Report is not a recommendation to buy / sell or hold any securities of the Company. CRISIL especially states that it has no financial liability, whatsoever, to the subscribers / users of this Report. This Report is for the personal information of the authorized recipient only. This Report should not be reproduced or redistributed or communicated directly or indirectly in any form to any other person or published or copied in whole or in part especially outside India, for any purpose.

' CRISIL Limited . All Rights Reserved. Published under permission from CRISIL"

CRISIL maintains Infinite Computer` valuation grade to 5/5

CRISIL Research has come out with its report on Infinite Computer Solutions (India). The research firm expects revenues to register a two-year CAGR of 13.3% to US$ 283 mn in FY14 (17% to Rs 14.4 bn) driven by the messaging platform acquired from Motorola and Infinite's transition to higher-value services such as analytics and mobility.

Infinite Computer Solutions (India) Ltd (Infinite) is a mid-tier IT services and solutions provider. It has always focussed on large blue-chip companies, mostly US-based, on the back of higher onsite presence and lower billing rates. Lessening of business from a top client and expiry of the Fujitsu BOT contract are concerns. However, we expect the company to maintain its growth trajectory based on the recent long-term deal wins. We maintain the fundamental grade of 3/5, indicating that Infinite's fundamentals are good relative to other listed securities in India.

In recovery mode post hiccups in the recent past
Infinite is trying to recover from the major setbacks of the past three quarters. While business from one of the top clients has reduced, other large client accounts have grown. Infinite has also won large long-term deals over the past quarter, which increases growth visibility. The company plans to scale up the value chain by increasing the share of higher-value services and cross-selling them across all its six verticals. The ability to bag more business from the existing and some of the recently acquired clients will provide an upside.

Messaging platform is the key growth driver:

We expect Infinite's 10-year deal with Motorola for the latter's messaging platform will be a key growth driver. This contract provides high revenue visibility; it accounted for 14% of Infinite's top line in FY12 with a much higher EBITDA margin. The deal places Infinite in the bigger league in the IP business. Smooth execution will make it a preferred vendor for similar deals.

Risks: Client concentration, high debtor days
a) Top five clients continue to contribute a major portion of Infinite's total revenues (73%). Business trimming by any of the large accounts will have a huge impact on Infinite. b) Delays in the government's R-APDRP project have increased debtor days to 102 days, which is much higher than that of its peers.

Expect two-year revenue CAGR of 13.3% in US$ terms:
We expect revenues to register a two-year CAGR of 13.3% to US$ 283 mn in FY14 (17% to Rs 14.4 bn) driven by the messaging platform acquired from Motorola and Infinite's transition to higher-value services such as analytics and mobility. Adjusted EPS is expected to grow at a lower CAGR of 9.0% over FY12-FY14.

Valuations the current market price has 'strong upside':
CRISIL Research has used the discounted cash flow method to value Infinite at a fair value of Rs 157 per share. This fair value implies P/E multiples of 5.1x FY13E and 4.7x FY14E earnings. We maintain the valuation grade of 5/5.

CRISIL Limited . All Rights Reserved. Published under permission from CRISIL"

Cipla wins patent case against Roche

The Delhi High Court today held that Indian pharmaceutical major Cipla  has not infringed upon the patent right of Swiss drug company F Hoffman La-Roche on a cancer drug.

Justice Manmohan Singh said Roche's patented drug Erlotinib Hydrochloride, promoted under the brand TARCEVA is also valid like Cipla's cancer drug promoted under the trade name ERLOCIP.

The decision came on a petition filed by Roche accusing Cipla of manufacturing and marketing the cancer drug under the trade name ERLOCIP which it claimed was the generic version of its patented drug Erlotinib Hydrochloride, promoted under the brand TARCEVA.

Both the drugs are used to cure cancer ailments like lung and pancreatic cancer.

Details of the judgement were not available. Explaining the outcome of it, Cipla's counsel Pratibha M Singh said that the court has said the Indian company's patent cannot be revoked and is valid.

When contacted, the counsel for the Roche declined to comment on the judgement.

Wockhardt's FCCB holders withdraw winding up plea

Pharma firm Wockhardt  said the trustees of its foreign currency convertible bonds (FCCBs) withdrew their winding up petition against the company from the Bombay High Court today.

Wockhardt had restructured its Rs 3,400-crore foreign currency debt following the global downturn. But it subsequently defaulted on payment to the tune of USD 110 million in 2009, after which, the bondholders dragged the company to the Bombay High Court and filed a winding up petition.

But the company successfully divested its nutrition business to the French company Danone and has so far received Rs 1,280 crore from the deal with which it repaid the remaining Rs 200 crore of its outstanding foreign debt in August as per the High Court direction.

The company now plans to prepay its debt and exit the corporate debt restructuring mechanism in the next few months, Wockhardt chairman Habil Khorakiwala had told the AGM last week. The company is now looking at repaying loans worth Rs 1,300 crore to banks which it had restructured, Khorakiwala had said, adding the company had Rs 900 crore cash in hand.

"The repayments will significantly improve the balancesheet position and our net debt to equity ratio now stands below 1," he said. Wockhardt was unable to pay dividends to its shareholders this year because it has yet to exit CDR, but Khorakiwala has assured shareholders about announcing dividend payouts next year.

The company's stock slipped to a low of Rs 251.25 and a high of Rs 1,437 in the last 52-week period. The stock closed at Rs 1,195.25, down 3.56 percent, on the BSE today, whose main indexSensex slipped 147 points .

Bayer fights courts for Nexavar as cheaper rivals take over

German drugmaker Bayer may be fighting it out in the courtroom to defend its patent rights on cancer drug, Nexavar. But out in the market, it's already lost considerable market share to cheaper variants from Cipla  and Natco . CNBC-TV18's Archana Shukla reports that the reason is the dramatic change in the dynamics of the Indian kidney-cancer market over the last one year.

It's been a lengthy battle for Bayer with the patent controller and it's still far from over. The latest is a setback for Bayer with the IPAB (Intellectual Property Appellate Board) rejecting the German firm's plea to stay the compulsory licence granted to Natco for its patented cancer drug, Nexavar.

A year ago, Bayer was servicing Nexavar to 200 patients - garnering Rs 11 crore. But while it has not been able to scale up since then, market sources indicate that in the last year, Indian generic firms Natco and Cipla have together sold generic versions of Sorafenib worth Rs 25 crore simply on the virtue of being cheaper.

Cipla, which is facing an infringement suit from Bayer as well, leads the Sorafenib market at Rs 6,890 per month

Both generic Sorafenib brands were launched at risk in 2011 itself. But sales up-tick was seen after Natco got the compulsory licence in March 2012, followed by Cipla slashing its prices by over 75 percent.

To take Cipla head-on, Natco is discounting its Sorafenib brand by over 30-40 percent, aiming to sell at price points of Rs 5,000 and secure multiple hospital tenders through aggressive pricing.

These attempts, industry sources say, will allow Natco and Cipla jointly service over 6,000 needy patients and about one-fifth of the target population of 30,000 advanced kidney and renal cancer patients.

Bayer in its appeal has also given an undertaking to sell Nexavar at Rs 30,000, but in the current market dynamics, Bayer's pricing could still be significantly higher.

While Bayer's main appeal against the compulsory licence order granted to Natco is yet to be heard, the changing dynamics have thrown open other contentions. With certain quarters questioning the cut-off price for a compulsory license, this is an issue that may prove controversial going forward.