Pharma Stocks Outlook for the weeek – 26 to 30.05.2014
(www.rupeedesk.in)
Frontline pharmaceutical stocks are likely to trade with a negative bias due to
expectations of the rupee gaining against the dollar in the long term. Pharma sector will
also take some cues from the broader market which is likely to experience a volatile trade
next week due to expiry of May futures and options contract.
However,some impact of strength in rupee on pharma stock was overdone. We believe
the recent underperformance by pharma sector stocks and fears of a further downside due
to strengthening rupee are unwarranted from a long-term perspective.
The financial experts are also said that there is high potential for most stocks in the
sector, with its top picks being Dr Reddy's Laboratories Ltd in the large cap and Ipca
Laboratories Ltd and Divi's Laboratories Ltd in the mid-cap. The Street will also be
watching out for drugmakers that will be reporting their earnings for the quarter-ending
March.
India's largest drugmaker by market capitalisation Sun Pharmaceuticals Industries Ltd
will report its earnings on Thursday and see the company posting a 33% on-year rise in
its net profit to 13.49 bln rupees.
The traction in the contract research and manufacturing services business of Divi's
Laboratories is expected to have been strong during the quarter. The optimisation of the
new DSN SEZ facility is expected to have helped improve the operating margin during
the quarter.
Jubilant LifeSciences Ltd will also declare its earnings for the said quarter on Monday,
while Indoco Remedies Ltd, Dishman Pharmaceuticals Ltd and Shasun Pharmaceuticals
Ltd will post their earnings on Wednesday.
