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Informist, Friday, Jul 26, 2024

MUMBAI – Shares of pharmaceutical companies are likely to extend their gains next week. Factors such as strong earnings from major drugmakers, signs of a pick-up in the US businesses, and growing sales volumes across key global markets are appealing to investors, analysts said.

Investors are increasingly moving towards the defensive sectors, such as pharmaceuticals and fast-moving consumer goods, said Jatin Gedia, a technical research analyst at Sharekhan. But pharmaceutical stocks are being preferred more now after some major FMCG companies reported weak corporate earnings recently, he said. The defensive sector is getting a further boost as some investors are moving away from "high beta names" in the market such as defence and railway stocks, which are taking a backseat now after their recent sharp rally, he said.

Now, investors await the June quarter earnings of Dr. Reddy's Laboratories, due Saturday. Next week, they will look at quarterly earnings of GlaxoSmithKline Pharmaceuticals, Granules India, Mankind Pharma, Pfizer, and Sun Pharmaceutical Industries, among others.

Margin growth in Apr-Jun will likely be aided by increased sales of high-value products and geographical mix, while increased costs related to marketing and research and development may pose risks, analysts said. For contract research, development and manufacturing firms, the weak funding environment in the US for biotechnology companies seen recently, may hurt earnings growth in the June quarter.

Among big names that reported strong earnings this week are Cipla and Torrent Pharmaceuticals. The Nifty Pharma was the top gainer among sectoral indices this week, ending with gains of nearly 6%. The index also hit a record high today. Most constituents in the index ended higher today and also this week.

Investors had hoped for some impetus to the pharmaceutical and healthcare sector in the Union Budget for 2024-25 (Apr-Mar), but there were no significant announcements targeting the sector, analysts said. The Budget, on Tuesday, fully exempted three more cancer medicines from customs duties, which were 10% earlier. This exemption from customs duties is likely to benefit AstraZeneca Pharma India which is a key player in the domestic oncology drug segment, as per analysts.

TOP HEADLINES
* US FDA issues zero observation to Alembic Pharma:'s Panelav unit
* Piramal Pharma consol net loss falls YoY to 886 mln rupees in Apr-Jun
* Sun Pharma gets US FDA's nod for LEQSELVI to treat alopecia areata
* Mankind Pharma to buy Bharat Serums from Advent for 136.3 bln rupees
* Glenmark Life Sciences Apr-Jun PAT down 17.7% YoY to 1.1 bln rupees
* Earnings Review: Lower capacity utilisation weighs on Laurus Labs
* Laurus Labs Apr-Jun consol PAT almost halved YoY to 125.1 mln rupees
* Glenmark Life asked to halt production at Ankleshwar unit
* US FDA conducts surprise inspection at Gland Pharma Dundigal unit
* Earnings Review: Syngene reports fall in Apr-Jun bottomline, margin
* Jyothy Labs Apr-Jun consol PAT rises 5.6% YoY to over 1 bln rupees
* Syngene Intl Apr-Jun consol PAT falls 19% YoY, sales down 2.3%
* Alembic Pharma gets US FDA nod for fluphenazine hydrochloride tablets
* Earnings Review:Torrent Pharma consol PAT up as sales grow in key mkts
* Piramal Pharma to acquire stake in SPV for cheaper green power
* Dr Reddy's to Sat mull alteration in share capital via stock-split
* Suven Pharma gets observation letters from BSE, NSE for merger
* Torrent Pharma Apr-Jun consol PAT rises 20.9% YoY to 4.57 bln rupees
* BUDGET: Govt to exempt three more cancer medicines from customs duty
* Gland Pharma gets US FDA's tentative nod for generic of Vyzulta drug
* Zydus Life gets US FDA final approval for generic of Diovan tablets
* Zydus Life gets Mexican regulator's nod for Bevacizumab biosimilar
* US FDA tags Jubilant Pharmova arm unit 'voluntary action indicated'
* US FDA issues 2 observations for Zydus Life's Ahmedabad facility
* Jubilant Pharmova consol PAT surges manifold YoY in Apr-Jun

Following are the resistance and support levels for the sector's key stocks for next week, as per calculations based on their prices on the National Stock Exchange:

End

Reported by Alina Geogy

Edited by Akul Nishant Akhoury

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