Pharma Stocks Outlook for the week - 19 to 23.May.2014
We
believe stocks of pharmaceutical companies are like to trade with a
negative
bias in the week ahead as a strengthening rupee will weigh on the
revenues
of most companies. The rupee is expected to weaken going ahead and
pharma
companies, especially larger companies like Dr. Reddy's, Sun Pharma
and
Cipla that have sizable chunk of dollar-denominated revenues are likely to
be
impacted. Within the pharma space, we are most bullish on Lupin as the
company
has a strong product pipeline and Unichem Laboratories, given its
good
domestic product portfolio. While we will watch out for company specific
events
over the next week, it will be a commentary on larger issues like tax
reform and economic
policy that will drive stocks in the sector.
