Pharma Stocks Outlook for the week – 25 to 29.05.2015

Pharma Stocks Outlook for the week – 25 to 29.05.2015

 Seen up next week amid a cautious market

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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.

Pharma Stocks Outlook for the week – 11 to 15.05.2015

Pharma Stocks Outlook for the week – 11 to 15.05.2015

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Stocks of major pharmaceutical companies are expected to trade in line with broader

market next week, except those that are announcing results in the following week.

Stocks of Lupin Ltd, Dr Reddy's Laboratories Ltd, Cadila Healthcare Ltd and Torrent

Pharmaceuticals Ltd are seen trading in line with the expectation of the earnings and later

the announcement of results for Jan-Mar.

Some stocks may show positive movement after continued negative momentum in the

past few weeks. Dr Reddy's will announce its Jan-Mar results on Tuesday, while Lupin

will detail its earnings on Wednesday. Cadila Health and Torrent Pharma will announce

their Jan-Mar earnings on Friday.

Domestic growth for Lupin will be at 20% on year, while US business will de-grow by

0.6%. Dr Reddy's revenue is likely to grow 8.3% on year. On the other hand, European

region is expected to show growth of 5% on year and Russia would witness de-growth of

15%. Margins are expected to improve by 180 basis points on year due to higher gross

margins.

Pharma Stocks Outlook for the week – 04 to 08.05.2015

Pharma Stocks Outlook for the week – 04 to 08.05.2015

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Stocks of major pharmaceutical companies are expected to show weakness in trading next week due to continued negative momentum from the past few weeks. Negative trading is expected to continue next week as currently there are no clear signs of an up move in the immediate term.

Among the companies reporting Jan-Mar earning the next week are multinational majors Pfizer Ltd and GlaxoSmithKline Pharmaceuticals Ltd, which will report their results on Tuesday and Friday, respectively.

For India's largest drug maker Sun Pharmaceutical Industries Ltd. After Daiichi Sankyo's share sale of Sun Pharma, we believe the price discount offers an opportunity to make an entry in the company's shares. A weak market sentiment and discount offered by Daiichi Sankyo has pulled the stock down by 21% from its peak on April 7, 2015.

Pharma Stocks Outlook for the week – 13 to 17.04.2015

Pharma Stocks Outlook for the week – 13 to 17.04.2015

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As the Jan-Mar earnings season gets rolling from next week, stocks of major pharmaceutical

companies are seen falling because market players see earnings of these companies remaining

subdued. The quarterly results of pharmaceutical companies would be weak due to emerging

markets' currency headwinds, and lack of major drug application approvals.

US will remain key growth driver, albeit at a slower pace (around 6% in Q4FY15 versus 22% in 9 months FY15) due to slowdown in ANDA (abbreviated new drug application) approvals and impact of customer consolidation. India will remain strong on low base of previous year.

Euro, emerging markets, and other currencies, particularly from Europe, Russia, Ukraine, Brazil, South Africa, Japan, and UK, average currency depreciated 7-17% versus the rupee, while average dollar was up just 1% on year.

Due to this, Dr Reddy's, Glenmark, Ranbaxy, and Torrent are likely to be hit more than the others given their exposure to emerging markets. It further said earnings were seen strong for Cipla and Cadila in Jan-Mar. Cadila is seen reporting strong numbers on the back of margin expansion in US business due to price hikes, while Cipla's numbers during the period are seen improving on contribution from Nexium.

Aurobindo Pharma's earnings in Jan-Mar could be hurt due to lack of approvals while for Torrent Pharma, growth in US and Brazil may remain sluggish, Edelweiss added.

Pharma Stocks Outlook for the week – 14 to 18.07.2014

Pharma Stocks Outlook for the week – 14 to 18.07.2014
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Stocks of pharmaceutical companies are seen trading positive on defensive buying due to

expectations of a weaker broad market clubbed with resence of a positive momentum

showed by the sector during the past few weeks. Nifty is expected to touch the levels of

7,200 points by the next week or the week after that. So, on defensive buying, pharma

sector is seen positive for now.

We saw the two soon-to-be-merged drug makers Ranbaxy Laboratories Ltd and Sun

Pharmaceutical Industries Ltd--as the outperforming stocks next week. The high

possibility of Ranbaxy's shares touching the 600-rupee-level next week, which he also

saw as the resistance for the stock. He pegged support for the stock at 520 rupees. Stock

of Sun Pharma could touch its first resistance level of 775 rupees. He saw support for the stock at 710 rupees.

Pharma Stocks Outlook for the week – 16 to 20.06.2014

Pharma Stocks Outlook for the week – 16 to 20.06.2014
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Stocks of major pharmaceutical stocks are likely to move in a narrow range next week,

but may hold a positive bias if broader markets moves down due to defensive buying.

The pharma sector is seen moving in a range of plus and minus 2.5%. The broader

market is expected to take cues from the WPI inflation rate for May that will be released

on Monday. If stocks of banking, auto, infrastructure companies portray downward

movement early next week, we can expect to see buying in pharma stocks. If the 50-

stock Nifty falls below 7500 points, it can correct itself further. Stock of Divi's

Laboratories Ltd may outperform its peers next week on technical, along with those of

Cipla Ltd, which may gain 2-5%.

Pharma Stocks Outlook for the week – 09 to 13.Jun.2014

Pharma Stocks Outlook for the week – 09 to 13.Jun.2014
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Stocks of major pharmaceutical companies are likely to trade in a narrow range next

week as the broader markets are seen trading positively due to a higher buying taking

place in high-beta stocks. The BSE Healthcare Index is expected to trade in a narrow

range of 9900-10600 for a few more weeks. Buying in Pharma sector will only begin if

the broad markets see a reversal in the bullish trend. Ranbaxy Laboratories Ltd's stock

had been consolidating and any untoward movement in the scrip was largely newsdriven.

Yesterday, stocks of Ranbaxy Laboratories were up over 1% as the European Medicines

Agency has reinstated the good manufacturing practices certificate to the company's

Toansa facility. The news is positive for the company, and has come after a lot of

negative news flows on the regulatory fronts. For Ranbaxy to build positive momentum,

it was essential for the stock to break the 480-rupee-level. The 650-rupee-level was

important to be broken by stocks of Sun Pharmaceutical Industries Ltd, failing which

they are expected to trade range-bound, with a support level of 570 rupees. Stocks of

Bengaluru-based drug maker Strides Arcolab Ltd are expected to continue their upward

momentum, after it closed nearly 10% up yesterday from the previous close on the news

that it has received a nod from the US Food and Drug Administration to sell skin-disease

treating generic methoxsalen capsules.

Pharma Stocks Outlook for the week - 19 to 23.May.2014

Pharma Stocks Outlook for the week - 19 to 23.May.2014

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We believe stocks of pharmaceutical companies are like to trade with a

negative bias in the week ahead as a strengthening rupee will weigh on the

revenues of most companies. The rupee is expected to weaken going ahead and

pharma companies, especially larger companies like Dr. Reddy's, Sun Pharma

and Cipla that have sizable chunk of dollar-denominated revenues are likely to

be impacted. Within the pharma space, we are most bullish on Lupin as the

company has a strong product pipeline and Unichem Laboratories, given its

good domestic product portfolio. While we will watch out for company specific

events over the next week, it will be a commentary on larger issues like tax

reform and economic policy that will drive stocks in the sector.

Pharma Stocks Outlook for the week - 05 to 09.May.2014

Pharma Stocks Outlook for the week - 05 to 09.May.2014

Stocks of frontline pharmaceutical companies are likely to trade in a range next week.

Stocks of Glenmark Pharmaceutical Ltd and Lupin Ltd are expected to rise in the build

up to their Jan-Mar earnings.

The pharmaceutical sector, along with the broader indices, is expected to trade in a rangebound

manner. Glenmark and Lupin seem to be the outperforming stocks next week, in

the build up to their results.

The Street also expects Lupin, which will report its earnings on Wednesday, to post Jan-

Mar net revenues of 31.27 bln rupees, up 23% on-year. Jigar Mehta of Waves Strategies

said he saw near term resistance for Lupin at 1,020 rupees, and support at 980 rupees.

For Mumbai-based Glenmark Pharmaceuticals, we expect a Jan-Mar net profit of 1.98

bln rupees, up 18% on-year. Margins are likely to improve QoQ (quarter-on-quarter)

owing to milestone income of $4 mln from Forest Labs in 4QFY14 (Jan-Mar). US base

sales are likely to pick up marginally because the competitor has moved out of the

hydrocortisone butyrate (Dermatology) market in January 2014,"

Glenmark will report its Jan-Mar earnings on Thursday. Troubled drug maker Ranbaxy

Laboratories Ltd will also report its earnings on May 9, we expect the company's Jan-Mar

profit after tax to grow 18% on-year due to rise in revenues.

However, see Ranbaxy's stocks as the underperformer during the next week and expect

some correction in its prices

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Pharma Stocks Outlook for the week - 17.02.2014 - 21.02.2014

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 Counters of major pharmaceutical manufacturers are seen moving with a marginal positive bias during the coming week, even as a phase of consolidation is likely. Consolidation is likely in pharma stocks as there is no significant trend prevailing, and the earnings season is over. GSK Pharma's (GlaxoSmithKline Pharmaceuticals Ltd) results are eyed, but they should be in line with expectations. GlaxoSmithKline Pharmaceuticals is scheduled to detail its earnings for Oct-Dec on Tuesday.  The company is expected to post a net profit of 1.18 bln rupees, down 15% on year, according to an average of estimates. Net sales for the company are seen at 6.52 bln rupees, down 1% on year. The increasing acceptance of low-cost drugs by Indian companies, and over the coming couple of week’s stocks would trade positively. The sector and the associated counters are unlikely to see a significant impact of Interim Budget announcements scheduled for Monday. The decisions taken on Monday could well be reversed or scrapped post the elections due in Apr-May. The Central government is presenting vote-on-account for four months as general elections are due in Apr-May. Sun Pharmaceuticals Ltd and Aurobindo Pharma Ltd are the top picks for the week. 

Pharma Stocks Outlook for the week - 10.02.2014 - 14.02.2014

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Frontline pharmaceutical stocks are likely to move in a narrow range with some stockspecific movement based on Oct-Dec earnings of the companies next week. The only outperformers in the rangebound pharmaceutical space could be Cadila Healthcare and Divi's Laboratories. Cadila gave a good upward rally this week and will continue if it breaks an important resistance of 920 rupees, which is highly likely to happen. Dr Reddy's Laboratories Ltd and Cipla Ltd will report their earnings for the quarter ending December on Tuesday and Wednesday, respectively. Hyderabad-based Dr Reddy's Laboratories is estimated to post a 51% on-year rise in its net profit to 5.48 bln rupees during Oct-Dec. The company (Dr Reddy's) is expected to see strong traction in its Indian and Russian formulation businesses as well. For Cipla, we expects strong growth in export formulations led by Africa, improved traction in US and better on-year currency realisations. The company is seen posting an Oct-Dec net profit of 3.86 bln rupees, up 11% on-year. Mumbai-based drugmaker Wockhardt Ltd will post its Oct-Dec results on Sunday and Anand Rathi Stocks and we expects the company to post a net profit of 986 mln rupees, down 77% year-on-year following its issues with drug regulators abroad. Aurobindo Pharma Ltd yesterday reported a 355% on-year rise in its Oct-Dec net profit and its stocks hit lifetime high intraday. However, we sees some correction in the company's stocks due to profit booking next week. Other pharmaceutical companies to post their Oct-Dec earnings next week include Orchid Chemicals and Pharmaceuticals Ltd, Natco Pharma Ltd, Panacea Biotec Ltd, Elder Pharmaceuticals Ltd, Dishman Pharmaceuticals and Chemicals Ltd and Bafna Pharmaceuticals Ltd.

Pharma Stocks Outlook for the week - 27.01.2014 - 31.01.2014

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Stocks of major pharmaceutical companies are likely to trade flat-to-negative next week after participating in the broader market's weak movement yesterday. Despite being a defensive sector, various pharma stocks traded negatively or nearly flat today with the broader market trading flat too.

This trend is likely to continue next week, and we may not see the stocks rising. The Street will also watch out for companies posting their Oct-Dec earnings next week and companies posting good set of numbers are likely to have their stocks gaining. Other pharmaceutical companies that will report their Oct-Dec earnings next week are Ajanta Pharma Ltd, Indoco Remedies Ltd, Aarti Drugs Ltd and Merck Ltd. For Ranbaxy Laboratories Ltd, which received an import alert from US Food and Drug Administration for its Toansa plant yesterday

Pharma Stocks Outlook for the week - 13.01.2014 - 17.01.2014

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The movement in stocks of major pharmaceutical companies is likely to be positive next week as investors are expected to bet more on defensive stocks such as pharma and fast moving consumer goods. Higher focus is likely on defensive stocks as investors would be cautious ahead of the economic data Consumer Price Index inflation for December to be released early next week. The Index of Industrial Production for November was released earlier yesterday. Stocks of major drug makers may not gain much if the pressure from a negative Nifty spills over to the sector. Dr Reddy's Laboratories Ltd and Divi's Laboratories Ltd are expected to outperform next week based on their recent charts. Cadila Healthcare Ltd's stocks are likely to continue upward run and may touch 950-960- rupee levels by the end of January. Stocks of Cadila Healthcare yesterday closed at 872.05 rupees on the National Stock Exchange, up 11.69% from Jan 3 close. The stock rallied after it received the US drug regulator's nod to sell drugs in the country. Giving a sideways-to-positive view on Lupin Ltd. It is important for it (Lupin's stocks) to close above 950 rupees for us to have a positive view on it.

Pharma Stocks Outlook for the week - 06.012014 - 10.01.2014

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Stocks of major pharmaceutical companies, most of which ended down yesterday, are expected to trade flat with a negative bias next week. Some analysts believe that the stocks may not gain substantially next week on account of profit booking in the pharmaceutical sector, while others say it could happen for lack of any trigger. We would be particularly watching stocks of Ranbaxy Laboratories Ltd, Lupin Ltd and Aurobindo Pharma Ltd. Ranbaxy and Lupin have very important levels of 480 rupees and 930 rupees, respectively, to cross, failing which they will be seen as negative. The Foreign Investment Promotion Board yesterday said it will mull the foreign direct investment proposals of Lupin and GlaxoSmithKline Pte Ltd on Jan 10. 

Following the news, stocks of both these companies gained yesterday. GlaxoSmithKline Pharmaceuticals Ltd's stocks could continue their upward run if the board approves its proposal. GSK Pharma's parent company had recently said it would increase its stake in the Indian arm through an open offer at a price of 3,100 rupees per share. Yesterday, GSK Pharma's stocks closed at 2,986.15 rupees on the National Stock Exchange. Aurobindo Pharma expecting the company's profit to be driven by higher margins in US revenues. Stocks of Cipla Ltd are seen as the weakest in the sector with those of Sun Pharmaceutical Industries Ltd not far behind. These stocks have been performing in a range and have not shown any signs of outperformance. Sun Pharma's stock has been trading in a narrow range for the past few months. It should be avoided. 

Pharma Stocks Outlook for the week - 30.12.2013 - 03.01.2014

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Stocks of major pharmaceutical companies are likely to continue their upward rally in the coming week given the lack of any negative triggers. Most stocks in the pharmaceutical sector gained on this week's trading session. Scrips of Divi's Laboratories Ltd, Biocon Ltd, Cipla Ltd and Jubilant Life Sciences Ltd closed up 3.8%, 2.1%, 1.8% and 1.6% respectively from their previous closes. The S&P BSE Healthcare Index yesterday closed at 10000.55 points crossing the 10,000 mark for the first time. Buying Cipla's stocks while maintaining a neutral stand on other major stocks such as Dr Reddy's Laboratories Ltd, Sun Pharmaceutical Industries Ltd, Ranbaxy Laboratories Ltd and Lupin Ltd. 

Midcap stocks have rallied upwards and some stocks, which had not participated in the earlier rally of large-cap stocks, will continue to press. Small-cap and mid-cap stocks in pharma are having a good run and they will pursue their run. We expects the pharmaceutical sector to trade from flat to positive in the coming week. We sees the stocks of Divi's Laboratories outperforming other stocks next week, while expecting stocks of Sun Pharma to underperform as they're seen trading flat. 

Pharma Stocks Outlook for the week - 23.12.2013 - 27.12.2013

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Stocks of large cap pharmaceutical companies such as Lupin Ltd, Sun Pharmaceutical Industries Ltd and Dr Reddy's Laboratories Ltd are seen trading in a range next week with an upward bias, while mid-cap stocks such as Aurobindo Pharma Ltd and Divi's Laboratories Ltd are seen gaining. Aurbindo Pharma and Divi's Labs have great potential to gain in the short term. stocks of export-driven pharma companies will continue to gain due to the weakening rupee.

Pharma Stocks Outlook for the week - 16.12.20132 - 20.12.2013

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Shares of major pharmaceutical companies are seen trading from positive to flat next week as market players are likely to invest in defensive sectors owing to expectations of negative market. Pharmaceuticals and fast moving consumer goods are usually seen as safe havens when the broad market is expected to be down. On Wednesday, there is RBI (Reserve Bank of India) policy, before that market will be cautious, so pharma being defensive will gain. The central bank's decision will set the tone for the rest of the week. The market is expecting a 25 bps repo hike and this could trigger a knee jerk reaction and high beta stocks including those in bank Nifty and auto stocks may see a fall. Some companies have also launched new products in the US. Because of this, such companies have a positive outlook. The stocks of Cipla Ltd could see some consolidation in the coming week.

Pharma Stocks Outlook for the week - 09.12.2013 - 13.12.2013

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Stocks of major pharmaceutical companies are seen moving in a range with no specific trigger seen next week. Most of them will remain in a range bound kind of thing. This week because of some warning letters, there was some subduedness but that has recovered now. Jubilant LifeSciences Ltd was issued a warning letter by US Food and Drug Administration for its Washington unit for violation of good manufacturing norms. As per the (company) management, the issues raised by the US FDA are largely relating to SOP (standard operating procedure) and not very serious in nature. While the business from this unit currently remains unaffected. The support levels for Sun Pharmaceutical Industries Ltd, and Lupin Ltd are crucial, as these are heavyweight pharma stocks. 

Pharma Stocks Outlook for the week - 25.11.2013 - 29.11.2013

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Stocks of pharmaceutical sector are seen moving in a general positive trend, with some stock-specific movement expected in the coming week. Cipla Ltd is weakest among all the pharmaceutical stocks and is likely to continue with its pattern in the coming week. Stock of Wockhardt Ltd should be avoided since the company is under regulatory setbacks from various international drug watchdogs and that competing drug makers are eating into Wockhardt's business abroad. Aurobindo Pharma Ltd looks good with the stocking forming a positive pattern gaining nearly 15-20% in the last month or so. Stocks of Dr Reddys Laboratories Ltd is seen negative. 

Pharma Stocks Outlook for the week - 11.11.2013 - 15.11.2013

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Stocks of major pharmaceutical companies are seen consolidating next week apart from selective stocks that may perform based on their Jul-Sep earnings. Stocks of Aurobindo Pharmaceuticals Ltd may perform good. Compared with other stocks in the sector, Aurobindo Pharma has been outperforming since some time. The stock has formed reversal pattern and the volumes for the company's stocks had also pick up in the upside. Aurobindo Pharma detailed its earnings late Thursday posting a consolidated net profit of 2.35 bln rupees, Vs 2.22 bln rupees a year ago.