Pharma Stocks Outlook for the week –
13 to 17.06.2016
(Seen falling next week; Cipla may
buck trend)
( www.rupeedesk.in )
Pharmaceutical
stocks are expected to be subdued next week as investors continue to remain
bearish on the sector on account of regulatory issues surrounding the companies and their
weak earnings for the March quarter. In the recent past, the regulatory activism (US
FDA's stringent inspections and actions) has created some uncertainties surrounding
Indian pharma companies and could mar their financial performance in the near term.
Despite the
regulatory issues putting companies' earnings under pressure, our view is positive on
the long-term growth prospects of the sector. Market participants would prefer to
invest in other sectors that look fundamentally sound than pharmaceutical over the short
term.
Over the
next week, all pharmaceutical stocks, except Cipla, are likely to fall. The broader
market will also lend cues to the sector's stocks next week, especially as investors
await the consumer price-index based inflation data for May, due on Monday, and US
Federal Reserve's decision on monetary policy, due late on Wednesday.
