Pharmaceutical and fast moving consumer goods (FMCG) companies exporting to Russia have got a fresh lease of life. Expecting the revival of exports to Russia and a push to their export revenues, these stocks attracted heavy buying on Monday. The revival of exports to Russia would certainly give a big push to the bottomline of these companies, which have been badly hit in the last couple of months.

The worst affected was Hoechst Marion, which reported a 90 per cent drop in net profit in the second quarter. Revival of exports would help the company report much higher earning in future. The company's stock, however, rose marginally on Monday although it has already risen from Rs 325 to the current level of Rs 415 after the merger news with Rhone Poulenc.

Among the other major beneficiaries is Ranbaxy Laboratories,which was hammered to a low of Rs 240 after going ex-bonus at Rs 258. The scrip of Ranbaxy shot up by over Rs 13 to close at Rs 275.7 with a trading volumeof close to 2 lakh shares on the BSE. The stock, in the last two days, has shot up from Rs 250 to Rs 275 coupled with a surge in trading volumes. Trading volumes in the past few sessions have zoomed from around 50,000-60,000 shares to around 1.8 lakh shares a day.

Stocks of other Indian pharmaceutical companies like Dr Reddy's Lab and Cipla, which are expected to reap benefits from exports to Russia, too responded in a favourable manner on Monday and recorded substantial gains on the Bombay Stock Exchange (BSE). Dr Reddy's hit the upper end of the circuit filter at Rs 458, up from Friday's close of Rs 424. Cipla, after hitting a high of Rs 870, closed the day at Rs 860, up from the previous close of Rs 843.

Coupled with expectations of revival of Russian exports, the introduction of the Patents Bill in the current session of Parliament further aided the rally in these stocks. The assurance by the government of the likely introduction of the Patents Bill in Parliament next week to amend the Patents Act inorder to provide Exclusive Marketing Rights (EMRs) to foreign agro-chemical and pharmaceuticals firms further aided the surge in the multinational stocks. The Patent Act is being amended to fulfil India's assurance to provide legally-backed patent cover to foreign pharmaceutical and agro-chemical manufacturers.

The multinational pharmaceutical and FMCG stocks which have already recorded substantial gains, shot up further on Monday. After witnessing a spurt in multinational pharmaceutical stocks like Novartis, Glaxo, German Remedies and E Merck and FMCG stocks like Britannia and Smithkline Beecham Consumer, the latest to join the bandwagon are Knoll Pharmaceuticals and Smithkline Beecham Pharmaceuticals.

Late to catch on, these scrips have shot up with large volumes. Smithkline Pharma zoomed to hit the upper end of the circuit with a gain of Rs 31.5 to Rs 231.25, up from the previous close of Rs 399.5 with a huge jump in trading volume from 12,000-20,000 shares a day to over 1.25 lakh shares on Monday.Knoll Pharma too witnessed a surge in trading volumes with the daily trading volume of around 25,000 shares on BSE.

Soft target, hard gains

Rumours of the company taking over two software companies and paying a hefty dividend has been driving Max India on the bourses. In 16 trading sessions, the scrip has zoomed from Rs 115 to Rs 143.7 level. On Monday, the scrip touched a high of Rs 147 accompanied by hefty volumes. The company is reported to be in talks with two south based software firms. After the sale of its stake to Hutchison in its JV with the former, a cash-rich Max India had appointed Mckinsey & Co as consultant to advise about new areas of investment. The company proposes to invest around Rs 400 crore from the residual amount.

Earlier in the year, the company's subsidiary, Max Telecom Ventures Limited sold its 41 per cent stake in cellular joint venture Hutchison Max for Rs 563 crore. The company paid a 1000 per cent interim dividend to its shareholders out of the dividend income of Rs165 crore paid by its subsidiary Max Telecom Ventures Limited (MTVL). If the company successfully acquires two software companies, the valuation of Max India will improve substantially. Thus the current upsurge in the share price is a realignment in anticipation of the company turning to the lucrative software sector.Even after the distribution of interim dividend of Rs 100 per share, Max India is still left with an amount of Rs 36.43 crore out of Rs 165 crore. Thus, marketmen are hoping that there will another hefty dividend in the current fiscal and are consequently, driving the scrip. Even the company's announcement of good results for the six month period ended October 30, 1998 have improved the sentiment at the counter. The company achieved a net profit of Rs 171.36 crore for the period.