GOLDEN RULES FOR TRADING

Pharma Stocks Outlook for the week - 15.04.2014 - 17.04.2014

www.rupeedesk.in

 Stocks of frontline pharmaceutical companies are likely to gain next week after some stocks lost ground this week owing to market-specific drivers. We currently see the pharmaceutical sector in good health and expect better growth in the sector going forward. We expect better growth in India going forward as DPCO (Drugs (Prices Control) Order) related issues have been settled and companies are set to hike prices for NLEM (National List of Essential Medicines) products in April. We prefer Dr. Reddy's and Lupin among large caps, and IPCA and Cadila in the mid-cap space. 

Stocks of Sun Pharmaceutical Industries Ltd are expected to continue the upward rally, which began after the announcement that it will acquire the troubled drug maker Ranbaxy Laboratories Ltd for $4 bln. Yesterday, stocks of Sun Pharmaceutical Industries closed at 628.15 rupees on the National Stock Exchange, nearly 10% up from last Friday's close. For Ranbaxy Laboratories, the company's stocks are likely to move in sync with Sun Pharma's stock and it has moved Ranbaxy coverage to 'unrated' on belief that Ranbaxy stock's price movement will not be driven by fundamentals.