www.rupeedesk.in
Stocks of major pharmaceutical companies, which are defensive in nature, are seen gaining slightly next week due to continued concerns over the weakness in the rupee and cautious approach by investors ahead of the release of the key economic data. Yesterday, the rupee hit a fresh 11-month low of 57.1150 against the dollar before closing at 57.06.
Market participants will also eye the release of India's industrial production data for April and the inflation rate for May, which will offer clues to the Reserve Bank of India's likely rate action and stance at its mid-quarter review on Jun 17. As most investors would refrain from taking aggressive positions next week, pharmaceutical stocks stand a chance to gain due to their defensive nature.
Pharmaceutical stocks, which were on the verge of losing their defensive tag after being in the news for all the wrong reasons, are seen back on track with moderate Jan-Mar earnings.
The pharma universe reported 23% growth in revenue and 37% growth in core earnings, led by strong pace of growth in branded and international generics, improved mix from higher margin launches offset by increased R&D (research and development) costs and lower tax outlay at 21% versus 23% estimated. Revenue growth was strong for US, EU, while domestic growth was better than expected.
