Pharma Stocks Outlook for the week – 25 to 29.01.2016
Some
rebound likely; Glenmark earnings eyed
( www.rupeedesk.in )
Stocks
of pharmaceutical companies may witness some rebound next week after the
recent
sharp fall, but the upside is likely to be limited. Volatility is expected due
to the
derivatives
contracts expiry Thursday. Though some recovery is expected, there is not
much
in the pharma space, the Nifty Pharma index has fallen below the crucial
support
of 11200 and hence the trend remains weak. Most of the large cap stocks are
expected
to trade range-bound in the coming week. Investors will keep an eye on
earnings
of Glenmark Pharmaceuticals that will be released on Thursday.
Glenmark's
consolidated net profit in Oct-Dec is seen nearly doubling to 2.22 bln
rupees
from 1.15 bln rupees a year ago. Net sales are expected to rise 12% to 19.01
bln
rupees. The company's sales are going to be driven by the US market, as
business
in
emerging markets remain under pressure due to currency headwinds and prevailing
economic
crisis. Glenmark has halted sales to Venezuela since November due to
aggravating
economic crisis and capital controls imposed on transferring money out
of
the South American country. Stocks of Glenmark, which fell over 9% this week,
are
likely to trade range-bound next week. Biocon's earnings released on Thursday
were
slightly below expectations due to limited growth in the biopharmaceutical
products
segment.
Strong
growth in research services, good presence in insulin space and
commencement
of insulin facility in Malaysia may boost the company's performance.
Key
risks to our assumptions are slowdown in the biopharma segment and delay in
receiving
regulatory approvals for its biosimilar products in developing markets.
Overall
the broader market is likely to see some recovery but weak crude oil prices
and
concerns over the Chinese economy may cap gains. Next week, investors globally
will be eyeing monetary policy decision of the US Federal Reserve.