Pharma Stocks Outlook
Lacklustre for 3rd week in row as headwinds aplenty
This story was originally published at 20:39 IST on 13 December 2024
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MUMBAI – Pharmaceutical stocks could remain lacklustre for the third week in a row as investors may not be willing to put incremental money into the sector in the wake of concerns over delayed new launches for some drugmakers and slowing volume growth in India, according to experts. The Nifty Pharma index fell 1.2% this week, compared to a 0.4% rise in the benchmark Nifty 50.
The US business for Indian drugmakers remains fundamentally strong but, medium-term headwinds are seen weighing on sales growth in the world's largest drug market, including regulatory issues at some manufacturing facilities, delays in new launches, policy changes under President-elect Donald Trump's administration and rising costs. "Amid the tailwind of steady generic pricing, we believe execution of key launches will determine course of US sales in 2025," HSBC Global Research said in a report earlier this week. Moreover, the pipeline for complex generics beyond Revlimid will be monitored, it said.
The other big market, India, is witnessing muted volume growth. For November, price increases at 4-5% were the largest component of growth for the Indian pharmaceutical market, indicating slow volumes in branded generics, noted Nomura Financial Advisory and Securities in a report Wednesday. "The slowdown is also acknowledged by contract manufacturers that we interacted with, indicating low order book accretion in the recent past," the brokerage said.
"We think the growth rate for branded generics is impacted by market share gains by trade generics, generics and private label medicines," it added. The Indian pharmaceutical market's revenue grew by 9.9% in November, driven by strong sales of cardiovascular, urological, and gastro-intestinal drugs, according to research firm Pharmarack Technologies. All therapy areas saw revenue growth in November, but respiratory, anti-malarials and gynaecological drugs were laggards. The industry's overall volumes rose 3% in November, compared to a fall of 3% during October.
Churn within the sector could continue, believe analysts, with the defensive nature of the business ensuring that money managers continue to park some capital into drugmakers' shares.
Investors could favour names where the underlying fundamentals for medium-term growth are solid, and the risk to structural growth is lesser, such as contract firms and those with a strong drug launch pipeline beyond 2025, said analysts.
TOP HEADLINES
* IPO Alert: Sai Life Sciences issue subscribed 1.25 times as of Day 2
* Concord Biotech invests $1 mln in Palvella Therapeutics via convertible note
* Gland Pharma receives US FDA approval for Phytonadione Injectable Emulsion
* Alembic Pharma clears Brazilian health regulator's audit at API facility
* India Ratings revises Jubilant Pharmova rtg outlook to stable from negative
* Biocon sells 8 mln shares of Syngene Intl via block deal for INR 6.86 bln
* Alkem Laboratories to transfer trade generics ops to arm Alkem Wellness
* Glenmark Pharma arm's multiple myeloma cure study shows 75% response rate
* LIC sells 2% stake in Lupin from Jul 30 to Dec 6
* Biocon Bengaluru plant gets US FDA voluntary action indicated tag
* Suven Pharma to buy 56% stake in New Jersey-based NJ Bio, invest $64.4 mln
* Eight Roads Ventures, F-Prime Cap to invest INR 1.2 bln in Laurus Labs arm
* Piramal Pharma's US arm enters into a $407,400 settlement with VetDC
* IPO Alert: Sai Life Sciences sets price band at INR 522-549 per share
* Indian pharma market sales grow 10% in November; volumes rise 3%
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 | 28648.75 | (-)1.30 | 29204.70 | 28063.30 |
| Alkem Laboratories | 5372.55 | (-)2.40 | 5492.50 | 5281.60 |
| Aurobindo Pharma | 1208.40 | (-)3.00 | 1245.90 | 1154.40 |
| Biocon | 352.80 | (-)7.20 | 362.20 | 342.10 |
| Cipla | 1447.30 | (-)2.00 | 1465.90 | 1414.50 |
| Divi's Laboratories | 5876.70 | (-)4.10 | 5995.20 | 5785.00 |
| Dr Reddy's Laboratories | 1246.35 | (-)0.60 | 1264.80 | 1217.30 |
| Gland Pharma | 1748.10 | (-)3.60 | 1781.60 | 1719.90 |
| GlaxoSmithKline Pharmaceuticals | 2254.00 | (-)3.80 | 2335.20 | 2209.70 |
| Glenmark Pharmaceuticals | 1518.15 | (-)0.70 | 1600.30 | 1405.40 |
| Granules India | 584.80 | 1.60 | 611.50 | 543.60 |
| Ipca Laboratories | 1534.05 | (-)0.30 | 1579.30 | 1507.40 |
| Laurus Labs | 573.45 | (-)2.80 | 587.40 | 549.10 |
| Lupin | 2076.75 | (-)2.70 | 2147.60 | 2005.60 |
| Natco Pharma | 1441.80 | (-)0.60 | 1495.10 | 1405.40 |
| Pfizer | 5024.05 | (-)4.00 | 5149.00 | 4922.00 |
| Sanofi India | 6214.60 | (-)0.40 | 6355.50 | 6019.50 |
| Sun Pharmaceutical Industries | 1813.45 | 0.50 | 1844.20 | 1758.70 |
| Torrent Pharmaceuticals | 3345.85 | 0.40 | 3392.50 | 3270.80 |
| Zydus Lifesciences | 978.50 | (-)1.70 | 998.10 | 945.30 |
| Nifty Pharma | 22157.35 | (-)1.20 | 22483.80 | 21634.80 |
| Nifty 50 | 24768.30 | 0.40 | 25192.00 | 23969.00 |
| S&P Bse Sensex | 82133.12 | 0.50 | 83607.70 | 79345.50 |
End
Reported by Apoorva Choubey
Edited by Deepshikha Bhardwaj
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