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Stocks of major pharmaceutical companies are seen moving positively in the coming week, primarily on anticipation that most of the companies would post "good results" for Oct-Dec. Most companies would give good results. Dr. Reddy's Laboratories, Glenmark Pharmaceuticals, Lupin Ltd and Sun Pharmaceuticals are expected to post better-than-expected results. However, expects Ipca Laboratories, Ranbaxy Laboratories and Pfizer Ltd to post a lower-than-expected earnings. Launch of new drugs would also help the companies' stocks. Dr Reddy's Laboratories is set to launch its drug Propecia used to treat prostrate and baldness in men on Jan 1. This would be positive for the counter of Dr Reddy's. The Supreme Court's verdict on the National Pharmaceuticals Pricing Policy is expected on Jan 14, which, would cause some movements in the counters of pharmaceutical stocks.
In case, the apex court clears the government's new drug pricing policy, the scrips won't move much, as the possible impact on companies' bottomline has already been factored in. However, if the verdict is on unanticipated lines, there could be movement in some stocks. Under the National Pharmaceuticals Pricing Policy 2012, laid in Parliament on Dec 7, the ceiling of prices of essential drug formulations would be based on the simple average price of brands with over 1% market share. Earlier, the cap on essential drugs formulation and bulk drugs was cost-based.
