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Informist, Friday, Jan. 24, 2025

MUMBAI – Shares of pharmaceutical companies may bounce back next week after most corrected over the last 15 days. However, analysts do not expect any notable reaction from investors to the December quarter earnings of pharma companies as they are expected to be in line with the previous two quarters.

The Nifty Pharma index is expected to find strong support at 21800 points and may bounce back to 22700-23000 points by the end of next week, Brijesh Ail, head of technical and derivatives at IDBI Capital Markets & Securities Ltd., said. The Nifty Pharma index closed at 21872.40 points, down 2.1%, on Friday.

Among the major players, Sun Pharmaceutical Industries and Dr. Reddy's Laboratories are expected to outperform in the domestic branded formulations market as the rest of the players are expected to post high single digit growth in the segment, Vishal Manchanda, research analyst at Systematix Shares & Stocks (India) Ltd., said. He expects Sun Pharma to outperform in the US business on a sequential basis as the rest of the players are expected to exhibit flattish growth.

While there are no real triggers for the pharma companies to outperform, they might reap some benefits from the depreciation of the rupee, he said. Talking about the valuations of these stocks, Manchanda said they are a bit stretched for some companies and have not factored in the uncertainties looming in the next 12-month period.

With the earnings season in full swing, investor focus will remain on quarterly earnings of major companies to gauge how they fared amid sectoral headwinds such as a moderation in sales in key markets and lack of significant product launches. Dr. Reddy's, Mankind Pharma, and Laurus Labs have already detailed their earnings for the December quarter and have managed to beat the Street's expectations on at least one of the two key earnings parameters. Ajanta Pharma, Biocon, Cipla, and Sun Pharma are among those who will be detailing their earnings next week.

Sun Pharma's consolidated net profit for the December quarter is seen rising around 15% on year to INR 29.01 billion and its revenue is seen rising around 9% to INR 134.35 billion, according to an average of analysts' estimates. Cipla is expected to report a consolidated net profit of INR 12.16 billion, up 15% on year. Its revenue is seen rising 6% on year to INR 70 billion, according to an average of estimates.

Biocon's consolidated net profit for the December quarter may contract 84% on year to INR 1.07 billion and its revenue may fall 3% on year to INR 38.19 billion, based on an average of estimates from brokerages. Ajanta Pharma's consolidated revenue is seen rising 9% to INR 2.29 billion for the quarter on revenues of INR 11.71 billion, which are seen up 6% on year, according to an average of analysts' estimates.  

Shares of Gland Pharma fell over 7%, making it the worst-hit stock in the Nifty Pharma index this week. Mankind Pharma, Zydus Lifesciences, Alkem Laboratories, and Dr. Reddy's were among the worst hit. On the other hand, Laurus Labs gained over 6% and was the top gainer this week. It was also the sole gainer among 20 constituents of the index on Friday.

TOP HEADLINES

* Analyst Concall: PAT fell on Bharat Serums acquisition costs - Mankind Pharma    
* Granules India's Oct-Dec consol PAT falls 6.4% on year, sales fall 1.5%    
* Earnings Review: Mankind Pharma net misses Street view on higher expenses    
* Analyst Concall: Dr Reddy's sees R&D spending at 8.5-9.0% of sales in FY25    
* Earnings Review: Dr. Reddy's consol PAT misses view, grows a modest 2% on yr    
* Aarti Industries completes capacity expansion of ethylation unit in Gujarat    
* Dr Reddy's says to start GLP-1 product launch in FY26, US launch from 2032    
* Emcure Pharmaceuticals inaugurates R&D centre in Ahmedabad    
* Syngene Intl Oct-Dec net profit rises 23.3% on yr to INR 1.23 billion    
* Earnings Outlook: Strong growth in specialty pdts in US to boost Sun Pharma    
* Earnings Outlook: Domestic, Africa market sales to boost Cipla Oct-Dec    
* Biocon board to mull raising funds via CPs or private placement on Monday    
* US FDA grants orphan drug designation to Zydus Life's Usnoflast    
* Laurus Labs says US FDA issued 1 observation to co's US arm Laurus Generics    
* Earnings Outlook: Mankind Pharma net profit growth seen very weak QoQ, YoY    
* Income tax dept conducts search at offices, mfg units of Akums Drugs, arms    
* Piramal Pharma issues corporate guarantee of $216 mln for arm, step-down arm    
* HC junks AstraZeneca's plea against civic body's improvement charges demand    
* Glenmark Pharma's US arm launches Phytonadione injectable emulsion ampules    
* Cipla's arm gets 1 observation from US FDA for manufacturing facility in Goa    
* Court issues bailable warrant vs Ramdev, Balkrishna in misleading advt case    
* Zydus Life gets US FDA nod for Phase II(b) clinical trial for Usnoflast drug    
* Gland Pharma gets US FDA establishment inspection report for Hyderabad unit    
 

Following are the resistance and support levels for the stocks for next week as per calculations by Informist based on their prices on the National Stock Exchange:

End

US$1 = INR 86.20

Reported by Steffy Maria Paul

Edited by Ashish Shirke

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