The Reserve Bank of India's monetary policy Tuesday and Apr-Jun earnings of companies are likely to provide direction to pharmaceutical stocks next week. Traders are likely to be cautious and invest in less risky stocks on Monday, ahead of the Jul 31 monetary policy of the RBI. Being defensive in nature, pharmaceutical stocks are likely to attract investors Monday. A majority expect the RBI governor to keep the repo rate, at which it lends to banks under the liquidity adjustment facility, unchanged at 8.0% in the first quarter review of the monetary policy on Tuesday. Stocks of Cipla Ltd will be in focus as the company announces its quarterly earnings on Tuesday. In Apr-Jun, the Mumbai-based company's net profit is likely to rise 24% from a year ago to 3.13 bln rupees. Revenues may rise 22% to 18.93 bln rupees, decent growth in Cipla's domestic business, and higher realisation from exports because of the depreciation of the rupee.
However, the stock along with stocks of Cadila Healthcare may see some lows next week as the National Pharmaceutical Pricing Authority turned down the companies' request to increase insulin prices. Stocks of GlaxoSmithKline Pharmaceuticals and Pfizer Ltd are also likely to fall next week as the NPPA has cut the prices of vitamin C drugs ranging from 0.12% to 37.7% of the existing rates. Stocks of Dr Reddy's Laboratories Ltd are seen gaining next week as the US Food and Drug Administration has lifted the year-long import ban from the Mexican intermediates and active pharmaceutical ingredients manufacturing unit of the company. The company can now start importing products from the unit to the US.
(www.rupeedesk.in)
