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Informist, Thursday, Nov. 14, 2024

MUMBAI – Pharmaceutical stocks could extend their downtrend to next week, marking the fourth consecutive week of declines, as the outlook for the sector is uncertain and overall appetite for equities remains weak. The Nifty Pharma index lost 3.5% this week, after having fallen 1% each in the past two weeks. The stock market will be closed on Friday for Gurunanak Jayanti. 

Investors are cautious on the sector because of uncertainty over possible new policies under the administration of Republican Donald Trump in the US, which remains the world's largest drug market by value, said experts. Moreover, the fall in sales volumes of medicines in the domestic market during October is also a worry, they said. 

The Indian pharmaceutical market saw sales growth of 6% in October, driven by strong sales of cardiovascular, urological, and dermatological drugs, according to research firm Pharmarack Technologies, earlier known as AIOCD Pharmasofttech AWACS Pvt. Ltd. The industry's sales growth was 5.3% in September and 13.7% in October last year.

All therapy areas saw revenue growth in October, barring anti-infectives, anti-malarials, and respiratory drugs, Pharmarack said. During October, growth was driven by the average price increase of 5.2% compared to a year ago and by new launches, Deepak Jasani, head of retail research at HDFC Securities, said in a note Wednesday.

The industry's overall volumes fell 3% during the month. While most therapy categories saw sales volumes decline, anti-infectives and anti-malarials were the worst hit, along with vaccines. 

When it comes to the US business, investors are worried as Trump has not only indicated that Robert F. Kennedy Jr., a well-known critic of vaccines and advocate against Big Pharma, would play a significant role in decisions related to health policies in his administration, but also that he would put "America First" across all sectors. This could mean changes in strategy, pipeline or supply chains for global pharmaceutical giants, who are clients and business partners of many Indian pharmaceutical companies, according to analysts. 

Companies in the sector have reported a mixed set of earnings for the September quarter. Focus will now shift to regulatory actions and new launches by drugmakers. As the defensive nature of the business makes the pharmaceutical sector a good defensive bet, investors may not completely exit shares of drugmakers, but, investors may churn portfolios within the pharmaceutical sector, as seen this week.  

TOP HEADLINES

* Ipca Lab Jul-Sept net profit rises 50.6% on year to INR 2.44 billion
* SC rejects plea to mandate medical professionals to specify risks of drug
* US FDA issues 8 observations to Cipla's Bengaluru mfg unit post inspection
* Analyst Concall: Alkem Labs cuts FY25 sales growth guidance as US ops slow
* INTERVIEW: Launch pipeline sets Biocon up for accelerated growth - Group CEO
* Indian pharma market sees sales growth of 6% in October; volumes fall 3%
* AstraZeneca Jul-Sept net profit falls 27% on year to INR 384.3 million
* Earnings Review: Alkem Labs Jul-Sept consol PAT growth lowest in 6 qtrs
* Analyst Concall: Zydus Life sees growth uptick till FY29 post 2 new launches
* Suven Pharma Jul-Sept consol PAT rises 3.3% YoY to INR 822.1 million
* Aurobindo Pharma arm's facility gets good manufacturing practice certificate
* Earnings Review: Zydus Life Jul-Sept consol PAT, revenue up in double digits
* Natco Pharma Jul-Sept consol PAT surges 83.6% on year to INR 6.77 billion
* Alembic Pharma gets US FDA final approval for Ivabradine tablets
* Analyst Concall: Aurobindo Pharma expects better show in Oct-Mar
* Aurobindo Pharma not expecting meaningful launches from arm Eugia in 1 yr
* Alembic Pharma gets US FDA final nod for diltiazem hydrochloride capsules
* Biocon Biologics' Bengaluru unit gets US FDA voluntary action indicated tag
* Earnings Review: Aurobindo Pharma Jul-Sept consol PAT up 8% YoY; misses view
* Akums Drugs Jul-Sept PAT falls 4.5% YoY, sales down 26.5%
* Analyst Concall: Divi's Labs says GLP-1 a good opportunity, demand high
* Earnings Review: Divi's Labs Jul-Sept PAT surges 51% YoY, beats view
* Analyst Concall: Lupin sees US revenue run rate $250 mln/qtr in FY26
* Piramal Pharma gives corporate guarantee of up to 30 mln sterling for UK arm
 

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 Vidhi Verma

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