Companies & Sectors
Fosun buys majority stake in Gland Pharma for USD 1.4 billion
Chinese drug giant Shanghai Fosun Pharmaceutical Group Co. Ltd. has bought 86 per cent stake in Gland Pharma for about $1.4 billion.
 
This is billed as India's largest inbound acquisition in 2016.
 
Hong Kong-listed Fosun is controlled by billionaire Guo Guangchang while Hyderabad-based Gland Pharma is backed by global private equity firm KKR & Co.
 
While Fosun bought 86 per cent stake, the rest will remain with the promoter's family, sources in Gland Pharma said.
 
The deal is likely to be announced officially in a day or two.
 
Established in 1978, Gland Pharma has seven factories in Hyderabad and Visakhapatnam, manufacturing a variety of injectables and high quality APIs (active pharmaceutical ingredients).
 
It sells generic injectables, primarily in the US and Europe.
 
Gland had sales of around Rs 1,300 crore last fiscal, with 30 per cent Compound Annual Growth Rate (CAGR).
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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Maruti Suzuki's Q1 net profit up 23%
Passenger car maker Maruti Suzuki on Tuesday reported a rise of 23 per cent in its net profit for the first quarter (Q1) of 2016-17.
 
The company's net profit stood at Rs 1,486.2 crore for the quarter ended June 30, 2016 - up from Rs 1,208.1 crore in the corresponding period of 2015-16.
 
"The profit in the quarter was helped by a higher turnover, material cost reduction, higher non-operating income and lower depreciation," the automobile manufacturer said in a statement.
 
"Adverse foreign exchange movement reduced profits to some extent."
 
The passenger car major's net sales during the quarter under review stood at Rs 14,654.5 crore -- up 12.1 percent from Rs 13,078.3 crore for the quarter ended June 30, 2015.
 
Maruti Suzuki sold 348,443 vehicles during the quarter under review, logging a growth of 2.1 per cent over the similar period of the previous fiscal. 
 
The company's sales in the domestic market grew by 5.4 per cent to 322,340 units. However, exports during the quarter plunged by 26.7 per cent to 26,103 units. 
 
"The growth in the first two months of the quarter had been 10.2 per cent but the unfortunate incident of fire at a key vendor of the company resulted in lower sales in June 2016," the statement said.
 
"The company hopes to recover the lost sales during the course of the year."
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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Asset quality pains for M&M Financial Services to persist for the next few quarters: Report
Mahindra and Mahindra Financial Services Ltd (MMFS) would continue to feel the pains on asset quality for next few quarters as its non-performing assets (NPAs), especially from states like Maharashtra, Madhya Pradesh and parts of Uttar Pradesh (UP) has increased, says a research note.
 
In the report, Religare Capital Markets Ltd says, "During the fourth quarter, MMFS' gross NPAs (GNPAs) and net NPAs (NNPAs), on a 120 days past due (dpd) basis, increased to 10.7% and 5.4% from 8.0% and 3.2%, respectively. Management stated that on 90 dpd basis, NPAs would have been 15% with interest reversal of Rs300 crore."
 
"GNPAs and NNPAs of MMFS are unlikely to improve materially from current level in the next three to six months," the report says. "However, with reasonable improvement, management expects GNPA to improve by 1-2% (on 120 dpd) by FY17 end under base case scenario (asset growth of 15%). Management stated that the bucket movement is not happening which is a positive sign. The company is carrying Rs700 crore of excess provisions and may review (drawback from excess provision) as and when they transit to 90 dpd norms," the report added.
 
 
Up to March 2016, MMFS used to fully write-off all loans outstanding for more than 24 months. From the first quarter of FY2017 onwards, the company will provide only up to the unrealised value of loans (resale value of underlying vehicle will be considered). Therefore the company has reversed provision of Rs200 crore. The company has taken substantial discount to realisable value (as per the recent auctions) for arriving at provision write-back.
 
The company has about Rs1,000 crore worth of loans outstanding for 24 months. Collateral value of vehicles is around Rs400 crore and the company has applied about 50% haircut to collateral value. 
 
According to Religare, the Mahindra & Mahindra group company is seeing a sign of pick up in tractor segment, which is a high margin business for them. Disbursements in the tractor segment grew by 9% on quarter-on-quarter (QoQ) while total disbursement grew by 2.5% QoQ.
 
Maharashtra and Madhya Pradesh, which account for about 25% of NPAs for MMFS, suffered from below average monsoon since last two years. These two states are large markets for utility vehicles (UVs) and tractor segments and the company management expects 10-15% NPAs can reverse over the next one to two quarters on the back of good monsoon, the report says.
 
Religare says, "We believe MMFS is the best play on a monsoon recovery. Above normal rainfall expected this year will boost rural incomes and thus result in better asset quality, lower credit costs, higher disbursements and stronger margins."

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COMMENTS

Vikas Singh Gusain

2 months ago

Nice information

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