Pharma Stocks Outlook for the week – 24 to 28.10.2016
(Earnings of heavyweights to dictate trend)
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Earnings of Cadila Healthcare, Dr Reddy's Laboratories,
GlaxoSmithKline
Pharmaceuticals and Glenmark Pharmaceuticals, scheduled for
release next week, will
direct the movement in the shares of the sector. Sentiment over
the sector remains
positive, so the shares may rise next week. On Wednesday, Cadila
Healthcare is
expected to report a consolidated net profit of 3.93 bln rupees
and a topline of 24.97 bln
rupees.
We expect the company's consolidated net sales to grow by nearly
9% to 25.5 bln
rupees driven by a rise in revenue from its US business. Growth in
the US formulations
business (of Cadila) is expected to be largely driven by launch of
authorized generic of
Asacol HD.
For the next week, the stock is expected to be neutral, and will
find support at 382
rupees. But on a longer term, the bias remains positive, and it
could rebound towards
399 rupees. On Tuesday, Dr Reddy's is expected to report a
consolidated net profit of
3.13 bln rupees, while it is expected to report a topline of 34.76
bln rupees. We expect
the stock to rise towards 3,185 rupees, above which it could test
3,227 rupees. The
stock is finding strong support on a long term basis at 3,012
rupees.
India's largest pharmaceutical company Sun Pharmaceutical
Industries is expected to
find strong support in the range of 710-735 rupees. While the bias
is likely to be neutral,
if it stays above 735 rupees, it could rise towards 759 rupees,
and above it test 772
rupees.