n Research Views
Torrent Pharma (TRP@IN; Buy, Target Price-Rs538)
n Torrent Pharma has signed a deal with Astra Zeneca for 15 products in 9 emerging markets
n Revenue from these products will start contributing from FY11E onwards
n Some of the products have already been developed by Torrent and few more will be developed
n Torrent Pharma has not disclosed any financial details but we believe that there will be some upfront payment
n We expect a revenue upside of US$15-20mn in next 2-3 years from this deal
n Company has indicated that it is a routine deal
n As of now we are not changing our earning estimates for FY11E and FY12E; waiting for more clarity
n We view this development as positive one and re-iterate our Buy rating on Torrent Pharma.
n Technical Comments
Triangular breakout
After a very tight and narrow session throughout the day, in the final hour Nifty saw a breakout in the favor the bulls, which was again accompanied by good volumes. On account of this upside breakout from the symmetric triangle, the next ceiling for the prices is now at 5175 mark. Further the MACD has also waved a green flag with its positive crossover, which satisfies the theory of momentum cycles, according to which a positive crossover that is attained near an oversold level or even neutral level in an uptrend is likely to work well and same is the case as of now.
BSE IT
Buying was witnessed in the BSE IT index and it outperformed the broader markets and finally closed at 5343 with a gain of 1.00%. On the daily chart this index had already 61.80% of the recent fall from 5442 to 4758, thus now going forward this index can test 5442 levels.
BSE Bankex
BSE Bankex index continued its upside journey and finally closed at 10348 with a marginal gain of 0.69%. Going forward this index is still looking strong and we maintain our upside target of 10698.
Regards,
Emkay Research
Emkay Global Financial Services Ltd.
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