Pharma Stocks Outlook for the week – 19 to 23.10.2015 (Large caps to restrain sector's uptick)

Pharma Stocks Outlook for the week – 19 to 23.10.2015

Large caps to restrain sector's uptick

 ( www.rupeedesk.in )

Lack of buying interest in large cap pharmaceutical stocks such as Sun Pharmaceutical Industries Ltd, Cipla Ltd and Dr Reddy's Laboratories Ltd are expected to restrain the upward movement in the sector next week, with the CNX Pharma index seen trading in a narrow range. There is more buying seen in high-beta stocks, especially metals, because of which in pharma sector, sideways action could be seen next week. CNX Pharma index is expected to trade in a range of 13000 to 13400 next week.

Stocks of Dr Reddy's, while seen trading in a range next week, could have a positive outlook if it manages to breach its resistance level of 4,300 rupees. The Street will also watch for Bengaluru-based Biocon Ltd's Jul-Sep earnings, to be announced late Tuesday. Biocon's revenue is likely to grow 18% YoY to INR8.8b (8.8 bln rupees), driven by 32% growth in the CRO (contract research) division, 15% growth in biopharma sales and licensing income of INR60m (60 mln rupees). While the medium term view on Biocon was negative, the share had a positive outlook for the shorter term.