Pharma stocks shine; Cadila, Laurus Labs, Biocon shares jump up to 15%

Cadila

Most pharma stocks were trading with strong gains in morning trade on April 7, keeping their sectoral index on BSE in the higher territory.

Around 1:15 hours, the BSE Healthcare index was 5.20 percent up at 13,039.55. Shares of Morepen Labs, Cadila, Laurus Labs, Hikal, Lupin, Biocon and Sun Pharma were trading with strong gains.

Pharma stocks have been gaining of late as industry experts and brokerages believe that the sector is better placed to navigate the crisis during COVI-19 outbreak even though the challenges faced by it are all same.

“We remain confident on the strong demand scenario from both domestic and export markets. Also, believe that these disruptions would not be meaningful from a full-year earnings perspective as the benefits of weaker currency could bridge the gap,” brokerage firm Centrum Broking said in a report.

Centrum says the export market will experience some price increases amid shortages and demand increase for generic drugs. However, it expects some impact on the Q1FY21 Indian pharmaceutical market (IPM) growth.

Brokerages do not see a meaningful adverse impact of the lockdown, which is in its second week, on the earnings of pharma players.

“With China resuming supplies of raw materials, potential disruption in manufacturing is now no longer a concern. There has been inflation in select raw material supplies but the same should only have a minor impact on gross margins during the quarter,” brokerage Nirmal Bang said.

“The India pharma market growth continues on expected lines – high single-digit. In the US, we could see marginal benefit coming from dollar appreciation and a potential increase in the stocking at the wholesaler level which should be offset by currency depreciation in emerging markets due to declining crude prices.”

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

News Source: Moneycontrol

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