Pharma Stocks Outlook for the week – 13 to 17.04.2015
( www.rupeedesk.in )
As
the Jan-Mar earnings season gets rolling from next week, stocks of major
pharmaceutical
companies
are seen falling because market players see earnings of these companies
remaining
subdued.
The quarterly results of pharmaceutical companies would be weak due to emerging
markets'
currency headwinds, and lack of major drug application approvals.
US
will remain key growth driver, albeit at a slower pace (around 6% in Q4FY15
versus 22% in 9 months FY15) due to slowdown in ANDA (abbreviated new drug
application) approvals and impact of customer consolidation. India will remain
strong on low base of previous year.
Euro,
emerging markets, and other currencies, particularly from Europe, Russia,
Ukraine, Brazil, South Africa, Japan, and UK, average currency depreciated
7-17% versus the rupee, while average dollar was up just 1% on year.
Due
to this, Dr Reddy's, Glenmark, Ranbaxy, and Torrent are likely to be hit more
than the others given their exposure to emerging markets. It further said
earnings were seen strong for Cipla and Cadila in Jan-Mar. Cadila is seen
reporting strong numbers on the back of margin expansion in US business due to
price hikes, while Cipla's numbers during the period are seen improving on
contribution from Nexium.
Aurobindo
Pharma's earnings in Jan-Mar could be hurt due to lack of approvals while for
Torrent Pharma, growth in US and Brazil may remain sluggish, Edelweiss added.
