Sunday, April 5, 2009


Negative inflation could be delayed

WPI rises to 0.31% - but downside will continue.......

• The WPI rose to 0.31% for the week ended March 21, 2009 - the first weekly increase in yearly figure in last eleven weeks. (consensus was at 0.18%).

• On a weekly basis the WPI has increased by 0.13%. It was led by increase in price indices of Manufacturing group (increased by 20 bps) followed by Primary group (increased by 4 bps). The Fuel Group price index was marginally down by 3 bps.

• This is the second consecutive increase on a weekly basis (the first instance since week ending of Aug 30 and Sep 06 - ’08 when the WPI rose by 8 and 12 bps respectively on a weekly basis).

• The weekly increase in WPI largely owes to the increase in the price indices of Manufactured Products group by 20 bps (for the second consecutive week). The increase in Food Articles’ price index was led by increase in prices of oil cakes, tea and coffee whereas the prices of sugar,
salt and edibles oil were decreased. However, this rise was cushioned by decline price indices of Textile Group, Chemical Products, and Basic metals alloys & metals products.

• It was a mixed bag for the Primary Articles Group (rose by 4 bps). The price index of Food Articles was down whereas the price index of Non-food Articles went up.

• The Fuel Group price index was down marginally by 3 bps (prices of ATF rose and that of Furnace oil declined).

To see full report: INFLATION METER 040409

>Mphasis Ltd. (ULJK Securities)

MphasiS is India’s 8th largest software company with revenues of Rs.19, 065 Mn for the period October end FY08 (7 Month Period). EDS (Electronic Data Systems) has acquired 60% stake in MphasiS after which HP has acquired EDS. Thus HP has become the parent company of MphasiS. The company’s operations have been divided mainly into three segments namely Applications, BPO and ITO services across many verticals.

• The company is maintaining its business mix ratio of 2:1:1 in its Applications, BPO and ITO services respectively. In the applications segment nearly 34% is the form application maintenance and the 66% is in the form of applications development.

• In the ITO business the back office jobs are mainly done by the MphasiS and the front office job is mainly in the hands of the EDS India Ltd.

• The acquisition from the EDS has helped MphasiS to start its ITO space. After the acquisition of EDS by HP, a major chunk of the solutions based projects are bound to go for MphasiS and the projects coming from the HP might have a major competition from the EDS and HP India.

• The main drivers of consolidation in the sector are of two reasons like cost and the better solution.

• Company has expressed its view that the vendor consolidation may increase because of this bleak economic scenario and the companies are going to reap over the wallet sharing.

• The company is increasing the sales expenses as the market is still uncertain. Thus the company is going to show a marginal increase in the SGA expenses.

• The company may see the losses in the hedging because of forex forward covers that they have done in the past period.

• From the BPO business the company is still facing high attrition rates and the absentees. But the company is trying to decrease its buffer levels in the BPO.

• As of now the company is not going to have any lay‐offs and the salary cuts. The company is mainly focusing on the productivity plans and the planning cycles.

• The currency exposure for the revenues are in the order of 8%‐9% ‐ INR, 80%‐82% ‐USD and 18‐10% from the other currencies.

• Company expressed a view that the pipeline of the order book is healthy.

• Cash in hand is $60mn and planning cycle for the Capex is larger because of the decrease in the hiring. We are positive on the stock as far its operations and the clientele list is concerned, though the near term concerns remain.

To see full report: MPHASIS

>Ranbaxy (KR Choksey)

Daiichi expanding its wings to Indian market

Ranbaxy to Launch Daiichi Sankyo’s innovative antihypertensive drug, “Olvance” in India

First product from Daiichi Sankyo’s portfolio to be introduced through Ranbaxy -
Ranbaxy, the idnian subsidiary of Japan’s Daiichi Sankyo has annpounced that Ranbaxy would launch Olvance (Olmesartan Medoxomil, antihypertensive), which was originally discovered by Daiichi Sankyo. This follows a licensing agreement between the two companies authorizing Ranbaxy to promote and market the drug in India.

Benefits to Daiichi Sankyo

• This move would scale up Daiichi’s innovative product introductions in India, through Ranbaxy.

• The drug is expected to be launched in 50 countries world wide thus strengthening company’s portfolio in the antihypertensive segment.

Benefits to Ranbaxy

Launch would strengthen Ranbaxy’s presence in the antihypertensive segment.
• Olvance is an effective, fast acting and well tolerated antihypertensive agent aand the clinical trials of Olmesartan have shown it to be significantly more effective at reducing blood pressure. Ranbaxy being a significant player in the cardiovascular disease segment and leader in Statins the cholesterol reducing agents the introduction of Olvance will further strengthen Ranbaxy’s presence in the antihypertensive segment.

Impact on Earnings

“Olvance”, an antihypertensive drug, enjoyed a market size of ~ Rs 42 Cr last year (growth of nearly 91%). We expect the drug, which would be launched in April, 2009, to contribute ~ Rs 20 -25 Cr to the topline of the company from the Q2 CY09. The antihypertensive segment enjoys the domestic market size of ~ Rs. 2500 Cr.


Glaxo Smith Kline Pharma (GSK), which is having a licensing agreement with Daiichi, would be launching the same drug in India; and would turn out to be a major competitor. Apart from GSK there are two to three small players in the same drug category.


We have revised our earnings estimate keeping in view the revenue inflow from the approval for the generic version of Imitrex and the launching of anti hypertensive drug, Olvance. We are positive about Ranbaxy as Medicines and Healthcare products Regulatory Agency (MHRA) of UK, and the Therapeutic Goods Administration (TGA), Department of Health and Ageing of the Australian Government, have issued Good Manufacturing Practice (GMP) certificates for its manufacturing site at Paonta Sahib (India), following a joint audit conducted in October 2008. The MHRA approval will not only cover product filings for the UK but will also apply to product filings for the entire European Union.

To see full report: RANBAXY

>ICICI Bank (Morgan Stanley)

We are still not Buyers

While ICICI appears to be trading at attractive multiple (0.8x book), we will stay away. We expect ROE around 5% for F2010 and F2011, as revenues come off and credit costs rise. Given cost of equity of 12-14% in India, fair value (under Gordon growth) comes to 0.4-0.6x book. Plus, we see significant potential pressure on asset quality from the international asset book, adding to problems already existing in the consumer book. Until economic growth rebounds, ICICI’s fundamentals are uncertain.

International assets make up 25% of balance sheet, a significant source of concern The bank increased this book from a small base to US$22bn in about three years, implying a significantly unseasoned book. Moreover, many Indian corporates that went abroad to acquire or borrow are facing problems. We now build in impairment of about 10% on these loans with severity of 50%, suggesting a cumulative loss of about 5%.

Current impairment ratio is about 8%. We expect this to go into double digits in F2010. We make relatively conservative assumptions on severity across asset classes. However, we still expect further provisioning of Rs120bn over the cycle. We build in a further Rs80bn of provisioning for F2010 and F2011 combined, but it could be much higher.

Our new target price on the stock is Rs330. Our bear case value is Rs175 and our bull case is Rs600. But, to achieve the bear or bull case, either asset quality has to deteriorate sharply (bear) or the economy and markets have to improve significantly (bull). Neither of these is likely to happen quickly. Until then, the stock is likely to trade in a range of Rs225-440. Should it move meaningfully above or below this range, we would consider it a trading opportunity.

To see full report: ICICI BANK

>Reliance Industries (MERRILL LYNCH)

E&P valuation raised; Upgrade PO to Rs1,735

Upgrade PO by 13% to Rs1,735/share; Retain Buy
We have upgraded the E&P valuation (57% of PO now) of Reliance Industries (RIL) by 22%. The upgrade is due to the one-year rollover of the DCF of its 2P reserves and resources, assuming a 2% weaker rupee and more aggressive exploration upside valuation. A 2% weaker rupee in FY10E has boosted EPS by 3% and the valuation of other business by 1-4%. We raise our PO by 13% to Rs1,735/share. The revised PO offers 14% potential upside. RIL’s fair value on a DCF basis is Rs1,976/share (30% potential upside). We retain our Buy on RIL

E&P valuation up by 22% to Rs989/share (57% of PO)
As we are about to end FY09, we have rolled over by one year the DCF valuation of RIL’s 2P reserves and resources. This has boosted its E&P valuation by Rs95/share. Assuming a weaker rupee (Rs47 to US dollar vis-à-vis Rs45 earlier) has boosted the E&P valuation by Rs40/share. Exploration upside valuation is also raised by Rs40/share, as we now value 2bn boe as against 1.5bn boe earlier. E&P valuation has thus been raised by 22% to Rs989/share.

Adverse ruling on gas pricing main risk; hit Rs160-243/sh
Adverse court ruling on KG D6 gas pricing is the main risk. Downside to valuation is Rs160-243 per share if it has to sell gas at US$2.4/mmbtu to RNRL and NTPC.

FY10E EPS growth now at 37% YoY; FY09-11 EPS CAGR 34%
Assuming average rupee at Rs47 vis-à-vis US dollar (rupee at over Rs51 now) meant upgrade in FY10E EPS of RIL by 3%. Its FY10E EPS growth is now 37%. Two-year EPS CAGR to FY11E remains at 34%. We now also have FY12E EPS, which, at Rs207.8/share, is up 20% YoY. Thus, growth continues beyond FY11E.

To see full report: RELIANCE INDUSTRIES

>India Watch (HSBC)

Bond market: RBI to the rescue?

■ RBI quantitative easing measures to provide support to Government of India (GOI) issuance

■ However, GOI issuance could still surprise on the upside, keeping upward pressure on GOI yields

The RBI on 26 March unveiled the first half of fiscal year 2010 GOI issuance program and various Quantitative Easing measures (QE) to facilitate a smooth absorption of this issuance. During H1FY10, RBI intends to provide further liquidity to the system in the form of Market Stabilisation Securities (MSS), buybacks (INR420bn) and Open Market Operation (OMO) purchases of government securities (INR800bn). The latter amount is equal to about 33% of scheduled gross issuance of INR2,410bn and 57% of gross issuance minus bond redemptions (INR330.89) and coupon payments (INR679.24bn). During Q1FY10, MSS buybacks and OMOs will total INR375bn and INR400bn, respectively, with OMOs equalling 27% of gross issuance. Moreover, the RBI stated that it will be more consistent in its OMO operations (every alternate week on Thursday) and provide INR200bn in Ways and Means Advances to the government.

The RBI's QE announcements will provide some comfort near-term to the market, which had been looking for RBI OMOs to absorb at least 50% of GOI issuance. That said, risks of further fiscal slippage and disappointments on the supply front cannot be ruled out, certainly as the H1FY10 GOI issuance schedule contains a relatively high share of longdated issuance (68% of issuance is 10 years and longer). Official announcements that total FY10 issuance will amount to INR3.6tr correspond with the government's deficit target of 5.5% of GDP. However, our house view is for a 7% fiscal deficit, or INR4.6tr of total gross GOI issuance. Moreover, gross GOI issuance could be augmented further once RBI decides to convert INR328bn of additional T-bill issuance during FY09 into GOI bonds.

Given this backdrop, GOI yields may remain elevated over the next few weeks, also responding to the traditional tightening of liquidity in the run-up to the May general election, the election-related uncertainties and poor investor demand and liquidity in the secondary market. That said, according to our regression model, the fair value range for the 10yr GOI yield is 5-7.25%, assuming a 4% 10yr US Treasury yield by year-end. The range drops to 4.2-6.5% based on a 2.5% US Treasury yield and a further cut in the RBI reverse repo rate to 3% at the April quarterly MPC meeting. In turn, we recommend accumulating GOIs at yields of 7.25% or higher in tenors up to 10 years.

To see full report: INDIA WATCH

>Power Sector (EMKAY)

UI Regulations bring negative catalysts

The new CERC UI regulations – 1) are likely to negatively impact earnings of utilities such as NTPC and 2) bring negative catalysts for merchant power plants. The reduction in the peak UI rate from Rs10/unit to Rs7.35/unit (Rs4.08/unit for plants using fuel supplied under APM) is likely to reduce the average UI realizations of utilities thereby lowering the supernormal profitability in such transactions. Our back-of-envelope calculations suggest that FY10E earnings of NTPC are likely to be negatively impacted by 2.5-3%. Secondly, the reduction in peak rates is likely to reduce the peak short term tariffs to Rs6-8 /unit from Rs8-10 / unit at present. This in turn is likely to have huge negative impact (~ 20%) on the expected profitability and risk-reward perception of merchant power plants in the country.

New UI regulations bring negative catalysts to utilities* as well as merchant power plants
The new UI regulations brought by CERC bring negative catalysts to utilities* as well as merchant power plants. The reduction in peak UI rate is likely to reduce the average UI realizations of utilities which in turn will reduce the profitability in such transactions. The cap of Rs4.08/unit on plants using APM fuel is likely to further negatively impact earnings of utilities like NTPC which predominantly use fuel supplied under APM. The new UI regulations are also likely to reduce the peak short term tariffs which are directly linked with UI peak rates.

We expect negative impact on NTPC’s FY10E earnings
We manifested our analysis of new UI regulations on NTPC FY10E earnings estimates. We believe NTPC, which is predominantly using fuel supplied under APM, is likely to record lower average realizations per unit under UI transactions now - negatively impacting the supernormal profitability of such transactions. Though it is very difficult to ascertain the exact quantum of impact but our back-of-envelope calculations suggest that FY10E earnings of NTPC could be negatively impacted by 2.5-3%.

Likely to change risk-reward perception of merchant power plants
Our analysis, of different time periods with different peak UI rates, indicates that the peak short term trading tariffs are directly linked with peak UI rate. During January 2006 to April 25, 2007 when the peak UI rate was Rs5.70 / unit, 60% of the short term power was traded in the tariff range of Rs4-6/unit. Further, there were no short term trades at rates higher than Rs6/unit. Similarly during the period Jan 7, 2008 to December 31, 2008 when the peak UI rate was Rs10/unit, 36% of the short term power was traded at tariffs > Rs8/unit and 83% of the short term power was traded at tariffs > Rs6/unit. Thus, with reduction in peak UI rate by more than 26%, we expect peak short term trading tariffs to come down in the range of new peak UI rates. Further, the fact that during last one year, 36% of the short term volumes were transacted in the tariff range of >Rs8/unit, the reduction in peak UI rate is likely to have a major impact on profitability of merchant power plants. This in turn is likely to trigger negative perception towards the risk-reward of the merchant power plants.

To see full report: POWER SECTOR

>US Economics Analysts (GOLDMAN SACHS)

The Budget Outlook—A Trillion Here, a Trillion There…

■ We now expect a US budget deficit of $1.86 trillion (13.2% of GDP) for fiscal year (FY) 2009, up from the $1.425 trillion (10%) we projected in late January. The main reasons for this change are greater weakness in the economy and a view that more funding will be needed for financial stabilization.

■ Over the next ten years, we expect the deficit to cumulate to $9.4 trillion, including a $1.5 trillion shortfall for FY 2010. Our ten-year figure is close to the CBO's estimate for President Obama's budget even though we don't include all his proposals. Our weaker economic outlook makes up the difference vis-à-vis CBO and puts our ten-year profile well above the administration's $7.0 trillion estimate for its own budget.

■ As a result, we now project that federal debt held by the public will double as a share of GDP over the next decade, to 83%. With a primary balance (excluding net interest) that remains in deficit throughout this period, policymakers have some wood to chop to keep the debt in check. While they work on that, market participants should take comfort in the fact that the Treasury will benefit from low borrowing costs as well as from yields on assets the government is acquiring in its efforts to stabilize the financial system, most of which will also be repaid.

■ To finance this surge, the US Treasury will need to ramp up its borrowing still further in coming months. We put the total borrowing need (gross coupon sales plus the net change in bills outstanding) at about $3¼ trillion and $2trn for FY 2009 and 2010, respectively. Current financing patterns can cover the FY 2010 need, but the Treasury will have to find another $800bn or so in the next few months if our FY 2009 numbers are right.

To see full report: US ECONOMICS ANALYSTS

>Crude down on dollar bounce; econ unease lingers

Singapore - Crude oil futures fell Friday in Asia as a rebound in the dollar encouraged traders to take profit.

While regional share markets remained on track for a solid finish this week, traders noted a lingering sense of unease over the outlook for the global economy.

"We believe that oil prices are likely to slip back into the USD40's a barrel over the next couple of months, but may still head higher in the latter part of the year," said David Moore, commodity strategist at Commonwealth Bank of Australia. "Oil consumption remains weak."

On the New York Mercantile Exchange, light, sweet crude for delivery in May traded at $52.09 a barrel at 0630 GMT, down 55 cents, or 1%, in the Globex electronic session.

May Brent crude on London's ICE Futures exchange lost 46 cents to USD52.29 a barrel.

The dollar held steady against the euro but traded firmer versus the yen, briefly topping Y100, a five-month high.

Market participants still "want to see if the rally is real. The U.S. economy doesn't seem to have hit its bottom and crude demand is not strong at all," said Koichi Murakami, a broker at Daiichi Shohin.

Oil prices on both sides of the Atlantic surged about 8.8% Thursday as a decline in the dollar boosted buying interest among investors, amid renewed optimism over the global economic outlook.

The Dow Jones Industrial Average - for many traders, a barometer of the health of the U.S. economy - spiked above 8,000 points for the first time since February.

This followed a pledge by world leaders from the Group of 20 industrialized nations, who met Thursday in London, to step up efforts to tackle the downturn, including a USD1 trillion commitment to the International Monetary Fund.

Oil's rally showed how a weak dollar and stronger stock markets can fuel speculative fund inflows to commodities, even if fundamentals remained soft - a trend that could persist in the near term.

"Until burdensome domestic supplies of crude and products become too onerous to ignore, we look for the petroleum complex to tag along behind these...large financial swings," Jim Ritterbusch, president at trading advisory firm Ritterbusch and Associates, said in a note to clients.

U.S. non-farm payrolls and unemployment data due at 1230 GMT will guide trading for much of Friday, he added.

Still, other analysts observed that sentiment isn't being driven only by macroeconomic considerations.

Supply-demand factors may be starting to lend support, particularly on the recent aggressive output cutbacks by the Organization of Petroleum Exporting Countries, according to Barclays Capital.

"We see the recent move up in prices as fundamentally justified, as pronounced supply-side (tightness), both in terms of OPEC cuts and involuntary non-OPEC production reductions, have more than offset the steep fall in demand," analysts led by Gayle Berry said in an overnight report.

"As the year progresses, we envisage a further tightening in oil market balances, as the pace of year-on-year demand decline moderates and the full impact of ongoing production declines filter through the system."

At 0630 GMT, oil-product futures were mixed.

Nymex heating oil for May slipped 93 points to 142.98 cents a gallon, while May reformulated gasoline blendstock traded at 145.25 cents, 173 points lower.

ICE gasoil for April changed hands at USD452.25 a metric ton, chalking up USD1.25 from Thursday's settlement.


>Cement Sector (FIRST GLOBAL)


Dwindling demand & surplus capacity amidst current down cycle signal the end of good times…

Decline in realisation of cement companies appears inevitable on account of excess capacity & subdued demand

The Story…..

The profitable cement cycle, which kicked off in FY05 on the back of soaring demand for cement from the private sector and sent the industry’s price realization as well as profitability skyrocketing to new levels, is now coming to an end. The real estate boom and government’s announcements towards infrastructure development had acted as a catalyst and encouraged cement companies to add more capacities, which will now result in surplus capacity in the cement industry amidst slackening demand, as the global economy is passing through a period of turmoil. India’s GDP is on a slippery path, as is evident from the downward revision in its growth rate. The real estate sector, which accounts for around 60% of the demand for cement, appears to have lost steam and is expected to witness worse times ahead. Moreover, over the last one year, the government’s measures aimed at curbing inflation, such as duty free cement imports, banning of cement exports, and a multiple excise duty structure, have also delivered a severe blow to the cement sector.

The woes of the cement sector have not yet come to an end, despite the sharp decline in imported coal prices, the fall in crude oil prices, re-imposition of countervailing duty, a 4% cut in cenvat and a 2% excise duty cut on bulk cement. The depreciation in the Indian Rupee vis-à-vis the US Dollar has partially negated the positive impact of the decline in imported coal prices and the reduction in coal linkages still remains a key concern for cement players. Also, the higher levels of inter regional movement of cement on the back of the expected phenomenal oversupply will partly offset the benefit of lower fuel cost. In order to provide a boost to the demand for cement, Indian cement companies had passed on the benefits of the reduction in excise duty to the consumers after adjusting for the rise of 7-8% in rail freight costs. Going forward, a decline in the realisation of cement companies appears inevitable on account of the surplus cement capacity and subdued demand. So have the Indian cement industry’s good days come to an end? The answer is YES, as the industry, which is struggling with a decline in capacity utilization, is now preparing itself for a challenging 18-24 month period amidst the current down cycle. In this report, we have looked at the demand and supply scenario in the Indian cement sector and how the capacity additions announced by various cement manufacturers will be absorbed.

  • Indian cement industry in FY09E, FY10E & FY11E
  • Where the industry’s capacity utilisation is headed…
  • Our view on cement demand, oversupply, realisation & margins
  • Region specific analysis
  • Analysing the recent newsflow
Ramp up in installed cement capacity
  • Northern Region – Grasim & Jaiprakash show the way
  • Eastern region – Lafarge & Ambuja plan significant expansion
  • Southern Region – ACC, UltraTech, Zuari cement, Rain Commodity…and many more
  • Western Region – Entry of new player, Murli Agro amidst existing ones, such as Jaiprakash & ACC
  • Central Region - Maximum capacity expansion by Jaiprakash & Prism
  • All India - Big as well as smaller players have huge capacity expansion plans
Factors responsible for subdued growth in cement demand
  • Slackening demand from real estate
  • Exports growth to remain insignificant
  • Downturn in IT sector
  • Slowdown in GDP growth to negatively impact demand
  • Infrastructure activity could take a breather
Current factors determining profitability of cement players...
  • Coal – Imported coal prices decline…but the pain continues
  • Government intervention…more pain & little cheer
  • Competition from imported cement after 26/11?

To see full report: CEMENT SECTOR


Novartis India Limited is a leading provider of innovative solutions to improve health and well-being through activities to manufacturing and marketing of products & services in the areas of pharmaceuticals, over-the-counter (OTC) products, nutrition, eye care and animal health. The Company is a subsidiary of the Swiss giant Novartis AG, which is world’s second largest pharmaceutical company.

The company Business activities comprises of pharmaceuticals, generic and OTC drugs in the therapeutic areas of immunology and transplantation, oncology, gynaecology, central nervous system, respiratory, pain and inflammation, ophthalmics and orthopaedics; animal health in the areas of poultry, cattle and pets.; and has a presence in medical nutrition. The company product portfolio consists of key brands such as Sandimmun, Neoral®, and Visudyne in pharmaceuticals with new introductions like Benace®, Tegrital®, and Zaditen®, and holds leadership positions in Voveran®, Methergin®, Syntocinon® and Sandimmun Neoral®.

In generics category the focus of the company is to reduce the TB trade business and sustained in gynecology. The OTC business revolved around the vitamins, minerals and supplements category of products. Key brands include Otrivin®, a nasal decongestant and the T-minic® range of products in the segment of cough, cold and allergy. The new products and line extensions introduced in FY07 included Calcium Sandoz® Suspension, Calcium Sandoz® Woman Mix Fruit, Otrinoz™ and Benefiberm®. Spearheading growth in the animal health business were flagship brands of Tiamutin, Calborol™, Mifexm® and Mifex Oral® with Chelated Milmor Forte® being a new product. The company manufacturing facilities are located at hane, Kalwe, Turbhe and Mahad in Maharashtra.

Novartis India Limited has registered a continuous growth rate over past few years when most of the company’s competitor has registered a decline in revenue. The company is trading at a PE of around 10.3x. We expect the company to be de-listed in the future which could result in a high share premium for minority share holder and we reiterate “BUY” on the stock.

Highlights/Recent Updates
Novartis AG offers to buy more 39 per cent stake in Novartis India at INR 351 per Share
Novartis AG has offered to raise the stake in Novartis India Limited to nearly 90 per cent from the current level of 50.93 per cent. The offer is expected to open in May 2009.

Novartis gets USD 486 Million contract for build flu vaccine manufacturing facility in USA
Novartis announced that the US Department of Health and Human Services, Biomedical Advanced Research and Development Authority has awarded Novartis Vaccines a contract for up to USD 486 million over eight years to support the design, construction, validation, and licensing of US cellbased influenza vaccine manufacturing facilities to provide a prepandemic supply of influenza vaccine.

Novartis collaborates with USV to market Galvus in India
Novartis has collaborated with healthcare company USV to market its anti-diabetic product Galvus, in a move that would pitch the pharma company directly against Merck. Novartis plans to pitch this against Merck’s Januvia by pricing it lower in the Indian anti-diabetic market which saw total sales of INR 16.72 billion till June 2008.

To see full report: NOVARTIS