PULSE TRACK
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January 2007 IIP up 10.9%
STOCK UPDATE
Sun Pharmaceutical Industries
Cluster: Ugly Duckling
Recommendation: Buy
Price target: Rs1,341
Current market price: Rs1,014
De-merger of the innovative R&D division
Sun Pharmaceutical Industry is finally preparing to de-merge its innovative research division, and the company is holding a management presentation on March 15, 2007 to share and discuss the information about the new chemical entity (NCE) and novel drug delivery system (NDDS) research projects. Considering the innovative research and development (R&D) as low predictable business, longer time frame for commercialisation and significantly higher spending vis-à-vis the generics R&D, the company had proposed to spin-off its innovative R&D division covering NCEs and NDDSs into a separate company. As per the earlier proposal, the de-merger would be effective from April 01, 2006.
SECTOR UPDATE
Telecom
Taking a breather
After months of exhilarating growth, the cellular service industry took a slight breather in February, with the overall subscriber base growing by only 3.9% as against a growth of over 5% in some of the previous months. The subscriber addition during the month was lower partly owing to a lesser number of days in February; higher inflation could also have had an impact on the growth though. The overall numbers were particularly affected by the lower additions reported by Reliance Communications in the CDMA space partly due to the stringent user verification norms implemented recently by the Department of Telecommunications. Moreover, the fact that Reliance Communications is planning to gradually shift away from the CDMA space could have also had an impact.
MUTUAL GAINS
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