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Informist, Friday, Aug 30, 2024

MUMBAI – Pharmaceutical stocks could gain further next week, extending their rally to the third straight week, as growth prospects of the sector remain robust and valuations are seen reasonable, according to analysts. Upcoming patent expiries of high value drugs in the next few years, strong pipeline and an increase in the pace of new approvals have also boosted the overall outlook, apart from robust earnings, they said.

The Nifty Pharma index, up 3%, has been among the top sectoral gainers on the National Stock Exchange this week. Last week, the index had risen 3.5%. Sectors such as automobile, pharmaceutical, and capital goods reported operating profit growth exceeding 20%, and thus remain good investment options, said Prabhudas Lilladher in a note.

Drugmakers, such as Lupin and Cipla, which have biologics and speciality drugs in their upcoming pipeline are likely to be preferred, while others that are facing regulatory delays or have a relatively basic pipeline may not find favour with investors, said a city-based portfolio manager. Nomura Financial Advisory and Securities has a "buy" rating on Lupin and has raised the valuation multiple from 27.5 times to 30 times to factor in strong earnings support from product launches in the US, recovery in growth in markets outside the US and sustained control on costs.   

However, gains could be capped next week if regulatory actions by major drug regulators such as the US Food and Drug Administration continue and these agencies find more violations in good manufacturing norms. Companies such as Zydus Lifesciences and Aurobindo Pharma have recently been pulled up for non-compliance at their high-value injectable facilities.

TOP HEADLINES

* Zydus Life gets US FDA warning letter for Jarod injectable mfg unit
* Zydus Life gets US FDA final nod for Scopolamine Transdermal System
* Piramal Pharma to subscribe to 13.07 bln rupees of pref shrs of arm
* Torrent Pharma Indrad unit gets US FDA voluntary action required tag
* Natco Pharma files ANDA with US FDA for generic of lung cancer drug
* Biocon arm settles patent dispute over Stelara biosimilar
* Zydus Life gets US FDA's final nod for 68.5 mg Amantadine capsules
* INTERVIEW:Evolving trends for Big Pharma to benefit Syngene, says CFO
* Zydus Life says share price fall Mon not due to Sterling Biotech buy
* Lilac Investments buys 7.3% stake or 9.9 mln shares in Eris Life
* Alembic Pharma gets US FDA final nod for betamethasone valerate foam
* Zydus Life to buy 50% stake in Sterling Biotech for 5.5 bln rupees
* US FDA issues 3 observations to Dr Reddy's mfg unit in Srikakulam
* US FDA issues no observation to FDC's unit in Baddi, Himachal
* Sun Pharma launches tedizolid phosphate 200-mg tablets in India

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 Apoorva Choubey 

Edited by Ashish Shirke

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