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Stocks of major pharmaceutical companies next week are likely to track the Reserve Bank of India's third quarter monetary policy review to be announced Tuesday. On Jan 16, RBI Governor D. Subbarao had said India's inflation rate remained high and containing it would be the central bank's priority.
With the governor sticking to an anti-inflationary stance, most market players have been limiting their expectation from the RBI at the monetary policy review. The market widely expects the central bank to cut repo rate by a token 25 basis points and keep banks' cash reserve ratio unchanged.
Shares of pharmaceutical companies are also seen tracking their respective Oct-Dec earnings. Glenmark Pharmaceuticals, which would report its Oct-Dec earnings Tuesday, is likely to post strong numbers in the quarter. Glenmark, despite adjusting for licence income of $9 mln (483.7 mln rupees) from Forest Labs, we still forecast a strong growth of 23%.
Earlier this month, Forest Labs entered into a settlement agreement with Glenmark, which was looking to launch its generic version of hypertension treating drug Bystolic. The company's US partner Salix Pharma getting approval for its drug Crofelemer and clarity on the trial progression for key molecules such as asthma treating Revalilast and pain killer GRC 15300 were important for the company in order to meet its targets.
Shares of Cadila Healthcare are also likely to track the company's Oct-Dec earnings on Feb 8, Cadila Healthcare will report a 30% growth in its domestic formulations. The company is also likely to find better traction in sales in the US and Brazil.
Progress on the integration of Biochem, following the acquisition of this company in Jan- Mar, 2012 signs of recovery in the Zydus Wellness segment and sustainability of domestic business recovery.
