- 2 months ago
With the US announcing fresh tariffs on branded drugs and uncertainty around H-1B visa rules, both sectors are experiencing headwinds.
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00:00Thank you Suresha for that good afternoon and welcome to the market closing on a brand new
00:17collab show between business today and India today television it's 3 p.m. and we are here
00:21to share with you everything that you need to know about the market closing action first up
00:26let's take a look at what's hot in the world of corporate as well as the financial space
00:30sensex and the nifty slip over two and a half percent in this week as the markets extend their
00:40losses for the sixth consecutive session sensex falls 700 points below 81 500 the nifty also
00:46slips below 24 700 mark mid caps and small cap indices drop sharply all the sectoral indices
00:52are in the red there's pain for the indian pharma stocks as sun pharma orobindo gland pharma lupin
01:04and sipline many more tumble in trade most of these stocks are up to five percent lower in trade
01:09especially sun pharma that's hit a 52 week low in the intraday session today this is after trump has
01:14slapped 100 percent tariff one branded and patented drugs pharma exports promotion council of india
01:21however says there will be limited impact indian generics is seen as a cost-saving opportunity for
01:26the u.s supreme court has cleared the jsw steals 19 700 crore resolution plan for bpcl uh also overturns
01:38its earlier judgment supreme court rejects uh the pleas of ex-promoters creditors says ibc's
01:44turnaround goal has been achieved delays due to pmla not jsw
01:49wari energies shares have fallen over six percent in trade that's after the reports of u.s probe into
01:58alleged duty evasion on solar panels has been seen company says it has cooperated previously and will
02:04continue cooperating emphasizing commitment to u.s manufacturing expansion
02:09in an exclusive chat with business today maruti suzuki's part of banerji has said 80 000 daily
02:22inquiries 80 000 plus units sold since navaratri suv traction is stronger
02:34right on the top of the show we'll straight away go on to the breaking news that india
02:38u.s trade talks have taken center stage this week commerce minister piyush koel has led a
02:43delegation to the united states meeting top officials and investors to discuss a potential
02:49trade agreement let's now go across to my colleague karishma sudhani for the latest updates and details
02:54on the same karishma over to you what have you picked up well sakshir is an official word that's
03:00coming in from india's trade ministry and i'd like to just use the verbatim it is so which says of
03:05constructive meetings between washington and delhi it's been around two and a half months since
03:12we were told that there has been a seesaw of conversations but finally when a positive optimistic
03:18word comes in from the ministry it signals of a potential early conclusion of a bilateral trade
03:24agreement that could come in well within this year now sources separately have also confirmed us of the
03:29fact that the intent of conversations have have been positive and india's pitch has been clear on
03:37the fact that they first won the punitive tariffs of the 25 percent to be done away with so that we at
03:43least come down the ladder of the tariff on the tariff card and then the contours of the deal could be
03:51finalized especially pertaining to the sticking points that have been existing for quite a while now
03:56um in terms of pharmaceuticals my sources in the trade ministry are sharing that they are still
04:03studying it completely but the fact that we have a edge over in our exports on generic medicines it's
04:08likely that we are currently on the safe and a sweet spot when it comes to our pharma exports
04:14to the u.s all in all it looks like a good news to begin with and minister goel has returned
04:21india's chief negotiator rajesh agarwal also returned just day before yesterday to delhi and we are
04:26hoping that the sixth round of negotiations could take off any moment okay karishma keep an eye out
04:32on that development we'll continue to take all those updates from you meanwhile viewers will just
04:37now focus on the markets remember we are trading at the day's lowest point 24 646 now there's a 240
04:43point of a decline on the nifty and there's been a swift uh slipping of the nifty especially in the
04:47second half of the trading session look at the nifty bank that's also down by a percent now all the
04:52sectors are down in the red look at india weeks that's the fear gauge that's up by six and a half
04:57percent now at 11.4 that clearly shows that there is a lot of fear that's trickling into the markets at
05:02this point in time there are just about a few handful names from the nifty that are holding up
05:07lnt tata motors itc aisha motors reliance industries maruti but all of these are also unable to really lead
05:15the markets to a recovery side let's go across to my guest now uh sudi bandhupadi joins in he's the group
05:20chairman of indy trade capital warm welcome to you sudi good to have you with us uh first up help us
05:26understand you know last weekend we'd heard from the us that they have got even the it sector into
05:32the fold of tariff wars by implementing that hundred thousand dollars of an h1b visa fee that
05:38led to a two lakh crore rupees of market cap of a wipeout in the last five trading sessions for the
05:43it sector and now it's the pharma space we've been constantly waiting for donald trump he constantly
05:49mentioned that he is going to be putting tariffs seen like never before on the pharma sector and
05:54there you have it a hundred percent tariff announcement has come in although limited to
05:57the branded and the patented segment right now but it's definitely uh led to a sentiment beat at
06:02this point in time in the indian markets how are you looking at it sir well you're absolutely right
06:08i think uh mr trump has been talking about uh coming after the pharmaceutical industry for quite some
06:13time uh but having said that i would say that you know the current pronouncement of the uh president
06:20uh us president isn't that that bad for indian pharma generally there will be impacts here and there but
06:27the primary impact will not be much at this stage but again then you have will have secondary and
06:33tertiary impacts i'm actually worried on the cdmo players because somewhere around uh you know when
06:38when these these are implemented you may get to see that cdmo players are starting to lose business
06:45and opportunities because people will try and focus on on on doing a lot of work in us uh i'm assuming
06:51these things get implemented because there are a lot of question marks on that but assuming they get
06:55implemented i think cdmo players may be in for some trouble in terms of future business and contract
07:01renewals uh you know other than that at this stage indian pharma uh probably to a great extent is
07:07sheltered because they are not into branded so much uh some pharma will have some challenges uh
07:13maybe work hard will have some challenges because it's still not clear but what will happen to uh
07:18us eu treaty because that caps the tariff at 15 but you know whether it will be uh this pharma tariff
07:26will be over and above or uh it will get subsumed one doesn't know uh because some of these uh like
07:32what can't have facilities in eu which will export and which does export to us so things have to uh
07:39kind of mature before we can uh you know take a firm view but by and large indian pharma looks to an
07:44extent safe at this stage at this stage it looks uh to an extent safer from this 100 percent tariff
07:51because it's limited to the branded and the patented segment and what so deep j has been trying to
07:55highlight is that uh out of the 10 billion dollars or 10 and a half billion dollars of exports that go from
08:01the indian pharma industry to the us uh only one billion dollar is exposed because of the branded
08:07uh as well as the patented drugs that are exported to the us rest of them are in the generics category
08:13and so far there's not been any announcement of that but uh you know it will be very difficult to
08:19assume that generics will be safe uh you know in the future as well because this could be one of the
08:23first announcements that you know donald trump has done uh how would you look at then that uncertain
08:28scenario well uh i mean everything is possible with the current us administration but i think
08:35uh you know if if and when that comes that will be disastrous for us consumers uh you know of course
08:41it will be a problem for indian pharma companies but it will be disastrous for us consumers roughly uh
08:47you know 40 percent of us uh genetics which gets imported into us comes from india and if there is a
08:54significant uh tariff uh there will be cost escalation which will in some form or the
08:59other get passed on to the consumers which is not good for us so i'm not sure that's going to come
09:05but you can't put anything past this administration absolutely hold that thought that uh sir i'll come
09:11back to you we're also joined by vishal manchanda senior vice president institutional research
09:15systematics group on the phone line he is with us uh to talk to us about how significant is the us
09:21market for indian pharma exporters and what portion could directly be hit by this hundred percent
09:26tariff go on vishal good afternoon to you tell me how have you assessed the impact yeah hi good
09:31afternoon so india branded india exposure to the branded market in the us is about uh 900 million
09:39dollars and the primary company exposed to that space is san pharma uh so now if you look at the
09:46100 percent tariffs i think uh what happens here is i think what's also important is where is the
09:52drug manufactured so if you look at san pharma they manufacture most of their patented portfolio from
09:58europe us and canada so i think uh what what what we'll have to understand is what tariffs will be
10:07applicable to the portion of drugs manufactured in europe uh portion of drugs manufactured in canada
10:12uh and uh again uh so there's there's more uh details we need to understand around uh the
10:19tariffs as to uh whether 100 so i my sense is what's manufactured in europe uh will attract 15 percent
10:26tariffs what's manufactured in canada would depend on the mutual uh tariff rates between the us and canada
10:33and and there are additional components to it so i think essentially the tariffs get levied on the
10:40cost of the cost of sales and the cost of sales primarily there are three components within cost
10:44of sales one is the value of the api value of the formulation and the value of the ip so avishal tell
10:51me you just mentioned sun pharma is that the only indian uh export oriented pharma company that is
10:57likely to get impacted primarily with this hundred percent tariff no other company also the so first
11:03let me tell you we might not see hundred percent tariffs getting applied on the sun pharma portfolio
11:09we might see a lower setting uh applied and then it will it will be it will be applied on the cost
11:15of sales and not on the sales value so it's not going to apply on the 900 million dollar but it's
11:20going to apply on at what cost sun pharma sells to the u.s uh subsidiary can you give us an assessment
11:28of what could be the impact on revenues and margins for sun pharma our best estimate we don't have the full
11:34details on uh what is the cost of sales and how it is divided between the various uh uh so how much of
11:41the cost of sales is coming from europe how much of it is coming from india and other markets so but
11:46our best estimate is one to three percent of ebitda can get impacted fair point what are the opportunities
11:52and the options available with the companies to offset this impact for those who may be now anticipating
11:58that uh there could also be a futuristic announcement on generics as well even though our other uh market
12:05expert mr sudi bandyopadha believes that that kind of a step will actually be uh you know a self-goal
12:11for uh the u.s government because that will impact the u.s citizens the largest so we are hoping that
12:16doesn't happen but in case there is what are the opportunities uh and options available for the indian
12:21pharma companies i think for most part of the generic sales that india does to the u.s we we
12:27would have no choice but to pass on pass on the tariffs to the u.s consumer so we don't have enough
12:32margins to kind of absorb the tariffs uh so i think there's no and again uh probably if i look at the
12:39alternatives in terms of other other countries that can supply to the u.s in the same kind of replace
12:45the magnitude of supplies that india supplies to the u.s we don't have uh alternatives as well so i
12:51don't think u.s would have a choice there in terms of the general tell me uh vishal one thing that
12:56i want to understand is is this tariff purely a trade retaliatory move or does it actually reflect
13:01even concerns like pricing or quality uh so i don't think so these uh it's broadly it's in the same
13:10line as we have been seeing in the past these tariffs are basically to ensure uh to get the trade
13:16deficit right and uh so these are tactics to get that right sure uh vishal thank you so much for
13:24being with us and for explaining to us the impact that we could see so deep coming back to you uh to
13:29help us understand uh you know these fresh uh kind of imposing of the tariffs that we are seeing will
13:35these also cast a shadow on the uh ongoing talks that we have been having i mean before you joined in
13:42karishma was talking about the delegation led by our commerce minister to the u.s uh for progressing
13:48the talks and there are hopes that the sixth round will come in will these kind of tariffs also cast a
13:53shadow on the progressive talks that we've been having well i think this will be one component but i
13:59think this is a small component i think h1b uh visa fee is a bigger component as far as india is concerned
14:06uh also the other issues which i understand are being negotiated hard is the agricultural products
14:14dairy products i think these are more important at this stage is what i believe because there are
14:20certain red lines which india would not like to cross and you know us has taken a position where they
14:26definitely want india to accommodate uh on some of these issues i think the challenge is there uh you
14:33know there are there are so many moving parts as far as u.s tariff and policies are concerned these
14:39days that it's very very difficult to predict uh with certainty what's going to happen uh even
14:44tomorrow uh so let's wait and watch uh how things pan out but having said that i will mention shakshi
14:50that you know india u.s trade deal is not a done deal it's not an easy job i think it's going to take
14:56time uh the the commerce minister uh was expecting has been expecting that by fall the agreement will be in
15:02place i think it will be excellent if that is in place but i have my doubts considering the number
15:08of moving parts and number of uh you know issues which attract friction uh it will be a miracle if it
15:14is done by fall what would you do as an investor sribji on sectors like it and pharma that have been
15:21freshly imposed with the newer impact of the decisions that have been taken at the trump administration
15:28well as actually i've been uh talking about this for quite some time even before that uh you know
15:33yesterday's development happened or even h1b came in as far as pharma is concerned i have been saying
15:38that you know domestic pharma industry is growing at 25 cager focus on companies having significant
15:44domestic business so you know i've been talking about mankind pharma we're talking about some of the
15:49other pharma companies having significant domestic exposure we should look at that as far as pharma is
15:54concerned till things settle down as far as uh you know us is concerned because us is definitely the
15:59largest market for indian pharma companies who are uh into global businesses as far as it is concerned
16:07i've been again talking about focusing on niche it companies because you know let's say travel and
16:14tourism is growing rapidly uh globally and let's focus on companies catering to travel and tourism
16:19industry let's say rate gain technologies core forge let's focus on these companies because the scope
16:24is huge and it's continuously expanding similarly there is a massive transition happening in the
16:31automobile industry from uh ice engine uh internal combustion engine to ev and this transition
16:38requires a lot of technology support and some of the indian midcap it companies are providing that
16:43technology backbone whether it's a tata technologies whether it's a persistent systems and many many other
16:49companies so now now this this is a huge humongous job and it's happening all over the world let's
16:54focus on these uh technology service providers i think we will do well doing that see as far as large
17:01cap ip companies are concerned the challenge is ai is real and us corporates will insist on uh you know use of
17:08ai to deliver services which will uh erode into the margins of indian ip companies so maintaining margins
17:15uh will be a challenge uh improving margin will be a challenge for large cap indian it companies
17:21providing general it services fair point uh let's also listen into what uh mr sudarshan jen the general
17:28secretary of indian pharmaceutical alliance and namit joshi of farm excel had to really say about the
17:34hundred percent tariffs on the pharma industry as well applicable to patented branded products manufactured
17:42outside us it is not applicable to generics and india supplies mostly generics products to us india exports
17:51around 10 billion dollar medicine to us they consist primarily of generic products and apis
17:59so india is not likely to be impacted with this order this is more related to patented and branded products
18:07where india exports large part of the general pharmaceutical products into us so we don't find
18:13much of an impact being experienced into this particular category of the product what we export
18:19into us so in nutshell what what i can say is that uh still till day indian pharmaceutical supply chain
18:27resilience continues to be there for us and we continue to make us save more than 200 billion
18:36dollars every year by virtue of exporting low complex simple affordable genetics into the country
18:47well the indian export oriented sectors are looking at this uncertainty looming large and dealing with
18:53it it's the domestic facing sectors that are actually cheering the festive cheer back home in fact
18:59india is gearing up for this three lakh crore consumption boom with gst and income tax cuts along with
19:04rbi rate cuts as experts are calling it as the lollapalooza effect this trifecta is expected to
19:11fuel discretionary spending boost demand in rural and urban markets and also create opportunities for
19:16investors in the consumption link centers as well let's come back to understanding from sudeep how is
19:21he looking at the first three four days of how the festive season is kick-started we've already been
19:27hearing uh from a lot of sectors that record amount of demand the buying is already being seen how are you
19:33looking at it as an opportunity for investment sudeepji well i think the automobile industry is
19:39definitely cheering and we have heard about the record number of orders and inquiries which maruti
19:44is getting and some of the other automobile manufacturers are getting so yes i think there is a significant
19:51traction in the lower end of the market and remember this is what was missing particularly for a maruti or a
19:57hyundai i think uh you know there was a massive slowdown as far as uh lower end of the market was
20:03concerned and that this was leading to a lot of challenges now that segment is showing significant
20:09traction and significant amount of excitement maruti has gone ahead and launched multiple schemes and
20:14you know newer products as well to entice the customer even further so i think uh they are in for good
20:21days uh so maruti has been uh our favorite and we believe that even at uh current valuation prices have
20:27moved up since uh the the gst uh uh you know cut came was announced but even at current level maruti
20:34looks good from a one year plus kind of a uh new investment horizon we have been liking m&m and we believe
20:41that you know there may not be that much of excitement uh around that counter because of gst uh uh
20:46exemption gst relief but i think uh m&m can be looked at as far as consumer durables are concerned
20:53we do like blue star i think uh uh it's a it's a it's doing great job in the premium end of the
20:58market and of course uh you know consumption boost does help air conditioners there were lull in sales
21:04because of early onset of monsoon this time and they didn't get the kind of summer sale they were
21:08expecting but i think things will start picking up in the festive season so overall i think uh the
21:13consumption demand should pick up with rainfall being good interest rates having come down
21:19companies coming out with new incentives and of course on top of that the gst benefit which has
21:23been passed on absolutely since you've been talking about maruti suzuki in fact we had maruti suzuki's
21:30management with us on business today in fact festive car sales are revving up probably like never before
21:35maruti suzuki is actually seeing a huge rush with over 80 000 units sold since navaratri's day one
21:41and daily inquiries have also been pretty robust from attractive emis to strong suv demand here's
21:47what partha banerji senior executive officer for marketing and sales at maruti suzuki said on the
21:52festive boom beyond the festive rush of course you know we are coming towards the end of the month
21:58what kind of numbers are you looking at when it comes to month-on-month growth and of course how
22:02does the year now look like just a preliminary idea sir chetan it will be too early for me to give a
22:09forecast for next month and this month because right now the challenge is to meet the demand
22:16which we are getting through our dealers because a the dispatches we have stopped in the first 20 days
22:23due to the gst the dispatches has started only from the 22nd of september so many vehicles are right
22:29now in the transit we are trying to see to it that we are able to deliver the vehicle as quickly as
22:35possible and do we expect some kind of a delay because of course logistics issues do come up when
22:41it comes to delivery of vehicles from the oem side to the dealership side see one thing what we are
22:45seeing is in some of the variants the bookings the rate in which it is coming uh it is i would suggest
22:53through your channel to all your viewers please book your vehicle right now otherwise there could be
23:00a little bit waiting time on some of the variants okay there you have it and uh robust queries as
23:08well as a robust season that is this panning out to be uh for the auto sector that had been facing a
23:13lot of headwinds for quite a long time there's finally some good news that's pouring in into the
23:17numbers and uh you know the industry is also pretty point on the same as well a minute to go before the
23:23market shut shop so let's uh quickly focus on the closing of the markets and we'll come back to our
23:28conversation with sudeeb ji and of course take some viewers questions also right after that so the
23:33drifty is hovering 222 points lower in trade we've just seen slight pickup from the low point of the day
23:39but still uh slipping below that 24 700 mark at 24 668 to be precise at this point in time um all the
23:47sectors they close into the red in today's trading session with it having lost the most now almost
23:53uh 2.2 percent of a decline that's coming in on the it pack uh led by um of course followed by the pharma
23:59space that's also down by 2.2 percent in trade so both it and pharma the export oriented sectors have
24:05definitely taken this uncertainty globally on the chin consumer durables have also come under some
24:10selling pressure almost a two percent of a decline on that one broader markets also mid and small
24:15caps have also given into the bear grip today look at it almost over two percent of a fall for both
24:21these indices as well metals that were shining bright from last couple of sessions have also
24:25seen some profit taking we're also looking at psu banks coming under the profit taking mode
24:31autos financial services fmcg all of them down it's actually the only index that's in the green
24:37is india vix that's the volatility index 5.2 percent higher at 11.3 odd levels so keep that in mind a few
24:44handful of six stocks on the nifty managed to stay into the green towards the end of the session lnt
24:49tata motors itc aisha motors reliance industries and maruti suzuki that managed to gain ground but on the
24:56lower end use how um indus in bank m m eternal tata steel bajaj finance and pharma is all those
25:03stocks that dragged in trade today so that's how the markets have truly shut shop at let's go back
25:09to our conversation with sudeeb ji sudeeb ji how and when will we see the markets and uh could you also
25:16help us understand when it comes to the outlook as to when do you see the recovery happen and will it
25:21only begin once the tariff uh talk has been sold well i'm as i was mentioning earlier sakshi i'm not so
25:30convinced that the tariff issues will get resolved very soon uh it will take time as far as indian
25:36markets are concerned if you want to focus there uh rbi credit policy is not the corner if there are
25:41some good announcements in the rbi credit policy uh you know that may uh kind of charge up the market
25:47particularly for the rate sensitive segments uh and bfsi may start leading a leading the rally uh
25:54overall i think consumption demand is increasing which is leading to create demand increasing and that's
25:59good news for the uh industry as and the asset quality is also improving uh for the overall
26:05industry uh leave aside some unsecured uh segments uh so overall i think uh you know a little bit of
26:11of support from rbi bfsi can start leading the market uh the second segment which i uh i'm also
26:17enthused is this you know entire consumption theme and particularly consumer durables automobiles uh
26:23two-wheelers i think the the monthly numbers will start coming and that will give a very clear
26:29indication of how things are panning out for these companies as far as demand is concerned and that may
26:34again excite the market it may start even next week itself when we start getting numbers from these
26:39companies business updates and numbers from these companies so i i would rather focus on these uh
26:45cues uh uh you know then wait for the big announcement on the tariff b absolutely uh so
26:52sudeepji we have some questions for you coming in from our viewers we'll take a couple of those uh
26:56satyam sharma from mumbai wants to know from you sir that he's heavily invested in the pharma space
27:01and the fall in the short term uh should he worry should he sell the lot or should he uh continue to
27:07hold them what would your advice be well i would definitely advise him to hold there's absolutely
27:12no point to panic and exit uh as you've been hearing from uh myself as well as many other
27:18experts on the channel uh that uh the impact on indian pharma company is very very limited uh so please
27:24don't uh panic uh you know uh there's only one company to my mind which is directly going to get
27:30impacted is sun pharma but i'm sure they will figure out ways and means of uh you know minimizing the impact
27:36also okay so deepji one last question for you and this is from prasoon shah from vanodra he says uh
27:42coming in the festive season i'm hearing that a lot of ipos are coming in big ones like lg uh phone
27:48pay tata capital so should i save my uh funds for that and which one would you really prefer coming in
27:54no all these are good ipos good credible companies uh you know if you want to go for new generation
27:59platform companies phone pay is uh definitely uh what's uh looking at uh you know if you want to go
28:06for the traditional businesses tata capital definitely uh is a well-established nbfc with a
28:11credible track record for a very long time so every everyone has their positives uh uh i would say uh of
28:17course you need to look at the valuation at which they are coming and uh uh you know i think that's
28:23very very important when you apply for an ipo at what valuation you are getting in so wait for the
28:27valuation to be announced and then take the call all right thank you so much mr bandhupad there for
28:33being with us on the program and helping us with all your insights on the markets and of course
28:37solving some queries for our viewers as well but that viewers it's a wrap on the business today show
28:41and in case even you have some questions about investments mutual fund queries sips stocks or gold
28:46related questions please do send them to us on the number that's flashing on your screens and catch the
28:51business today show at 9 a.m tomorrow morning for all the trade setup in fact on monday morning with
28:56update up above a bagaya
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