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Stocks of major pharmaceutical stocks are expected to trade in line with the key indices with an upward bias next week. However, stocks of Ranbaxy Laboratories will be in focus next week, as the company will report its quarterly earnings Tuesday. Pharmaceutical stocks are likely to see a little upside next week following expected volatility in the market due to expiry of the February derivatives contract Thursday. As market will be volatile next week, investors will find safe haven in stocks of FMCG (fastmoving consumer goods) and pharmaceutical. This might push the stock prices in these sectors next week. The market will also closely follow the Union Budget for 2013-14 (Apr-Mar). Major pharmaceutical companies want finance minister P. Chidambaram to increase government expenditure on the sector. Drug manufacturers are also looking at rationalisation of excise duty for active pharmaceutical ingredients to bring them on par with other pharmaceutical goods and a reduction in the basic customs duty on formulations to 5%. "GST (goods and services tax) will be implemented this year and we expect the total tax rate for pharmaceutical industry to increase. To ensure proper distribution and availability of medicines all over India, the 2% central sales tax on inter-state transfers should be discontinued to reduce transaction costs," according to Daara B. Patel, secretary general, Indian Drug Manufacturers' Association.
Stocks of major pharmaceutical stocks are expected to trade in line with the key indices with an upward bias next week. However, stocks of Ranbaxy Laboratories will be in focus next week, as the company will report its quarterly earnings Tuesday. Pharmaceutical stocks are likely to see a little upside next week following expected volatility in the market due to expiry of the February derivatives contract Thursday. As market will be volatile next week, investors will find safe haven in stocks of FMCG (fastmoving consumer goods) and pharmaceutical. This might push the stock prices in these sectors next week. The market will also closely follow the Union Budget for 2013-14 (Apr-Mar). Major pharmaceutical companies want finance minister P. Chidambaram to increase government expenditure on the sector. Drug manufacturers are also looking at rationalisation of excise duty for active pharmaceutical ingredients to bring them on par with other pharmaceutical goods and a reduction in the basic customs duty on formulations to 5%. "GST (goods and services tax) will be implemented this year and we expect the total tax rate for pharmaceutical industry to increase. To ensure proper distribution and availability of medicines all over India, the 2% central sales tax on inter-state transfers should be discontinued to reduce transaction costs," according to Daara B. Patel, secretary general, Indian Drug Manufacturers' Association.
