Pharma Stocks Outlook for the week – 25 to 29.05.2015
Seen
up next week amid a cautious market
( www.rupeedesk.in )
Stocks
of frontline pharmaceutical companies are seen trading up next week amidst a
cautious market that rose nearly 2.5% during the week ended yesterday. Nifty is
seen correcting next week after yesterday's up-move. In that environment,
near-term outlook for pharmaceutical stocks is positive. Cipla Ltd's stocks are
seen underperforming the sector, adding that the company's stocks will be the
first ones to start losing if the sector exhibits any weakness.
Thursday,
Cipla announced that it would acquire 51% stake in Ugandan company Quality
Chemicals Ltd. The transaction has been done at 12x market cap/sales, which is
on the higher side, though given the balance sheet of the company can be easily
funded. Stocks of Dr Reddy's Laboratories Ltd outperforming its peers in the
sector next week as the Hyderabad-based company's stock did not witness much of
a fall as compared to other drug makers when the sector was seeing correction.
The
BSE yesterday announced that Lupin was being included in its benchmark index, Sensex.
Lupin's stock has recently bounced back, which should help it gain a positive
momentum going ahead.
