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Informist, Friday, Oct. 11, 2024

MUMBAI - Pharmaceutical stocks could outperform the market for the third week in a row, as prevalent worries over escalation of geopolitical tensions in West Asia, rising crude oil prices and slowing global economic growth will keep investors on the defensive. However, the pharmaceutical sector is not seen gaining much, as traction is likely to be stock-specific in nature because of a slew of corporate earnings expected next week, according to market experts.

The Nifty Pharma index rose 2% this week, marking the best performance among all sectoral Nifty indices. In comparison, the Nifty 50 ended flat for the week.

The pharmaceutical sector is being seen as a good defensive bet for the past few weeks, said an analyst with a local brokerage. Moreover, evolving global dynamics, such as patent expiries over the next five years and the US Biosecure Act, and healthy domestic growth have made the prospects bright for Indian drugmakers and contract development and manufacturing organisations, he said. 

Companies in the sector will start reporting earnings only from the week starting Oct 21. For the September quarter, many pharmaceutical companies are likely to see double-digit growth in sales and bottom line, along with margin expansion, said analysts. The scale-up of complex drug sales in the US, including those of Revlimid and Mirabegron, stable growth in the domestic market, and recovery in prices of generics in the US market will underpin the growth, they said.

"Within our coverage, we bake in sequentially higher R&D spends across companies, led by specialty R&D spends for Sun Pharmaceutical and Aurobindo Pharma," said brokerage Kotak Institutional Equities. Higher research and development spends may also be seen in case of Cipla, Lupin and Dr. Reddy's Laboratories, it said. The brokerage expects 9% on-year growth and 4% sequential growth in the organic revenue of its coverage universe within the sector. 

TOP HEADLINES

* Alkem Labs, Sonnet in pact to develop, mkt diabetic neuropathy drug in India
* Zydus Life gets US FDA's nod to make Paliperidone extended-release tablets
* Delhi HC lifts bar on sale, marketing of Sigrima by Zydus Lifesciences
* Nirma-owned Glenmark Life Sciences' board approves name change
* US FDA closes inspection of Alembic Pharma's Panelav unit; zero observations
* Dr. Reddy's arm gets DCGI nod for phase-2 of cancer treatment trial
* Biocon arm recommends policy push to up biosimilar usage
* HC asks govt to set up National Fund for Rare Diseases
* FOCUS: Indian CDMO cos must level up for opportunity from US Biosecure Act
* Natco Pharma says Mylan Pharma, Novo Nordisk settle Ozempic patent dispute
* US FDA issues 5 observations to Lupin's biotech facility in Pune
* Dr Reddy's Switzerland-based arm incorporates subsidiary in Denmark
* Aurobindo Pharma's arm in South Africa sells stake in JV for INR 33.5 mln
* Jubilant Pharmova Singapore arm to acquire 80% stake in France-based Jasmin
 

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 Deepshikha Bhardwaj

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