Pharma Stocks Outlook for the week – 21 to 25.11.2016
Investors will continue to trade in stocks of pharmaceutical companies based on
their earnings, and the stocks are likely to decline next week as demonetization
continues to curb spending in the short-term.
Demonetization in India is unlikely to have any material impact on domestic
business in our view, except possible trade disruptions in the near term. In the
short term, any minor pullback should be used as an opportunity to sell
pharmaceutical companies. However, over the long term, the view on
pharmaceutical stocks is bullish
We believe the long term outlook for Indian healthcare sector remains
structurally positive, considering abundant growth opportunities, strong balance
sheets, higher return ratios and free cash flow generation in pharma companies
and reasonable valuations. The Republican nominee's victory, they believe, will
aid Indian pharmaceutical companies' earnings in the long term.
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