Pharma Stocks Outlook
May outperform next wk on INR fall, US tariff on China
This story was originally published at 21:18 IST on 29 November 2024
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MUMBAI – Pharmaceutical stocks could outperform the market for the second straight week, not only because of the defensive nature of their business, which risk-averse investors are looking for, but also because the depreciation of the rupee and expected trade tariffs by the US on China could boost the sales of some drugmakers. The Nifty Pharma index gained 1.3% this week, compared to a 0.9% rise in the benchmark Nifty 50.
The pharma index had risen 1% last week, after falling for three consecutive weeks. Pharmaceutical stocks gained recently on the back of a combination of factors including the depreciation of the rupee, new launches, and proposed US tariffs on China, said experts.
Analysts at Goldman Sachs, earlier this week, upgraded the pharma sector to "marketweight" from "underweight." They expect that the sector could continue to see stable earnings growth in the next three-six months, amid earnings downgrades in other parts of the market, with potential tailwinds from the US BioSecure Act for contract manufacturing and development companies, and contract research firms.
On technical charts, too, several pharmaceutical stocks are on the verge of a breakout from a lower top and lower bottom formation, said analysts. Aurobindo Pharma, Biocon, and Divi's Laboratories look poised for good momentum, they said.
Some churn within the sector may also be seen, in favour of some pharmaceutical companies that are present in fast-growing areas such as CDMO, said a research analyst at a brokerage firm. For traditional drugmakers, Trump poses a threat, while new niche launches are key to sustaining growth momentum, he said. Any regulatory news will provide cues in the coming week, he said.
TOP HEADLINES
* Abbott India launches pneumococcal conjugate vaccine PneumoShield 14
* Dr Reddy's launches head and neck cancer drug Toripalimab in India
* Natco Pharma sells 14.38 acres of land in Telangana for INR 1.16 bln
* Dr Reddy's Lab, Senores Pharmaceuticals to launch Ivermectin tablets in US
* Glenmark Pharma's US arm launches travoprost ophthalmic solution
* Dabur India says GST office confirms INR-3.21-bln tax demand, drops penalty
* AstraZeneca gets nod from drugs regulator to sell Olaparib tablets in India
* Akums Drugs ties up with Jagdale Industries to market nutritional beverages
* UBS Principal Capital Asia sells 0.83% stake in Alkem Labs via bulk deal
* Aurobindo Pharma US arm signs pact with global pharma co to develop pdts
* US FDA issues 'voluntary action indicated' report for Torrent Pharma MP unit
* Nuvama cuts FY25 EPS estimate for six pharma cos after Jul-Sept earnings
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:
| Company | Price | Week-on-Week Change in % | Resistance | Support |
| Abbott India | 27723.40 | 0.00 | 28224.00 | 27128.00 |
| Alkem Laboratories | 5642.45 | 1.10 | 5776.10 | 5390.40 |
| Aurobindo Pharma | 1262.60 | 3.20 | 1285.70 | 1229.40 |
| Biocon | 365.15 | 10.20 | 371.90 | 358.00 |
| Cipla | 1533.90 | 3.20 | 1581.60 | 1466.20 |
| Divi's Laboratories | 6172.70 | 2.90 | 6335.30 | 5918.70 |
| Dr Reddy's Laboratories | 1202.30 | (-)1.00 | 1227.50 | 1186.10 |
| Gland Pharma | 1738.00 | (-)1.00 | 1762.80 | 1701.10 |
| GlaxoSmithKline Pharmaceuticals | 2444.40 | 1.40 | 2489.90 | 2373.20 |
| Glenmark Pharmaceuticals | 1528.65 | 3.40 | 1554.30 | 1483.00 |
| Granules India | 584.30 | 4.40 | 598.80 | 571.70 |
| Ipca Laboratories | 1542.55 | (-)3.10 | 1564.80 | 1503.40 |
| Laurus Labs | 567.15 | 10.60 | 583.60 | 540.10 |
| Lupin | 2050.75 | (-)1.00 | 2097.00 | 1975.90 |
| Natco Pharma | 1375.50 | 1.30 | 1410.40 | 1322.60 |
| Pfizer | 5313.25 | 1.70 | 5366.30 | 5254.70 |
| Sanofi India | 6390.50 | 5.60 | 6796.60 | 5967.20 |
| Sun Pharmaceutical Industries | 1780.90 | (-)0.80 | 1828.60 | 1715.40 |
| Torrent Pharmaceuticals | 3324.20 | 5.00 | 3418.90 | 3152.70 |
| Zydus Lifesciences | 965.95 | 1.80 | 986.10 | 939.30 |
| Nifty Pharma | 22240.20 | 1.30 | 22612.60 | 21610.10 |
| Nifty 50 | 24131.10 | 0.90 | 24343.50 | 23820.90 |
| S&P BSE Sensex | 79802.79 | 0.90 | 80482.00 | 78686.60 |
End
Reported by Apoorva Choubey
Edited by Deepshikha Bhardwaj
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