Pharma Stocks Outlook for the week: 07 - 11.01.2013

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Stocks of major pharmaceutical companies are seen in a range with a positive bias over the coming week, eyeing the Oct-Dec quarterly financial results of companies. Dr Reddy's Laboratories, Glenmark Pharmaceuticals, Lupin Ltd and Sun Pharmaceuticals are likely to post better-than-expected results. However, expects Ipca Laboratories, Ranbaxy Laboratories and Pfizer Ltd's earnings to be below estimates. 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 court clears government's new drug pricing policy, drug makers' counters are unlikely to witness much movement, as the possible impact on the companies' bottomline has already been factored in. However, if the verdict is not on anticipated lines, there could be movement in some stocks.

Under the National Pharmaceuticals Pricing Policy, 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 stock. Earlier, the cap on essential drugs formulation and bulk drugs was cost-based. Stocks of Ranbaxy will face resistance at 524 rupees, and find support at 500 rupees. The counter would ascertain a short-term positive trend if it breaks the resistance. Stocks of Sun Pharmaceuticals would trade between 725 rupees and 763 rupees. The support, if breached, would ascertain a short-term negative trend. Cipla Ltd stocks are seen trading in a range with a negative bias in the coming week. The stock would find support at 413 rupees and face resistance at 430 rupees.

Pharma Stocks Outlook for the week: 31.12.2012 - 04.01.2013

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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.

Pharma Stocks Outlook for the week: 24-28.12.2012

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Stocks of major pharmaceutical companies are seen moving in a narrow range in the coming week as the market awaits the Supreme Court verdict on the National Pharmaceuticals Pricing Policy 2012, expected on Jan 15. Positive movement in the pharmaceutical sector in the coming week is highly unlikely. The any major proposal for foreign direct investment in the sector, if announced, could be the trigger market is looking for. However, such a deal takes at least three months to get regulatory approvals, hence any uptrend is unlikely in the sector anytime soon.

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. The policy, after being "tweaked" by the government, would not be as detrimental to the sector as was anticipated.

Pharma Stocks Outlook for the week (10 - 14.12.2012)

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Stocks of pharmaceutical companies are seen rangebound in the coming week with a positive bias. The positive bias in the counters would mainly be because of defensive bets in the market. The National Pharmaceuticals Pricing Policy 2012 tabled in both Houses of Parliament yesterday is unlikely to have a major impact on performance of stocks of drug companies, as most of the impact has already been factored in. However, said the overhang remains, which would prevent any sharp rise in stocks of Indian subsidiaries of overseas drug companies, and such as Cadila Healthcare and Cipla Ltd. On the good valuation being received by Indian drug companies, Claris Lifesciences Ltd's announcement of entering a joint venture with Japanese companies at very high prices for its business was proof that multinational companies are still interested in Indian companies. Claris Lifesciences yesterday said it has entered into a definitive agreement to form a joint venture for its intravenous solutions business in India and emerging markets by selling 80% stake to two Japanese companies. Japanese companies Otsuka Pharmaceutical Factory Inc and Mitsui & Co Ltd will invest 10.5 bln rupees in the joint venture for 80% stake, Claris informed BSE yesterday.

Stocks of Ranbaxy Laboratories look positive for the coming week. The stock is hovering around its crucial support of 490 rupees, and expects stocks to face resistance at 540 rupees. Stocks of Sun Pharmaceuticals are seen consolidating, and trading in a narrow range next week. He, however, gave a very positive outlook for the stock. Pfizer Ltd looks weak for the coming week. The stock is seen trading between 1,100 rupees and 1,170 rupees. GlaxoSmithKline Pharmaceuticals Ltd, too, looks weak, and is seen trading in a very tight range. The stock is seen trading between 1,999 rupees and 2,080 rupees.

Pharma Stocks Outlook for the week(03-07.12.2012)

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Shares of pharmaceutical stocks are seen falling marginally next week due to lack of any positive trigger, market players. With the Supreme Court deferring the new pharmaceutical pricing case hearing to Dec 12, there is no major reason, which could drive pharmaceutical stocks next week. Rather, the stocks in the pack, are seen correcting next week after gaining in the past two-three weeks.

The hearing in a case on new pharmaceutical pricing policy has been deferred to Dec 12 following the government's delay in notifying the policy. The apex court had earlier set Nov 27 as deadline for the government to take a final stand on the pricing policy, asking the ministerial panel not be change the pricing formula in a manner that prices of essential medicines increase.

The Cabinet is now reported to have cleared the new pricing policy approving the recommendations made by the ministerial panel. Trend for the stock is seen negative for next week. But, if the stock manages to move above 530 rupees, it could turn positive.

Pharma Stocks Outlook for the week (19-23.11.2012)

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Stocks of major pharmaceutical companies are likely to trade in a range with a slightly negative bias during the coming week. With curtains on the earnings season, there is unlikely to be much activity in the sector stocks during the coming week. The only issue that could cause movement in pharmaceutical counters is the long overdue National Pharmaceutical Pricing Policy. The policy has been pending since 2003. The Supreme Court has now given a Nov 27 deadline for announcement of its details. The government is likely to make some announcement regarding the policy next week. Growth in the sector is seen under pressure till the pricing policy details are out, and counters of multinational companies such as GlaxoSmithKline Pharmaceuticals, Pfizer Ltd and Abbott Pharmaceuticals are likely to take cues from the specifics outlined, India being one of their biggest markets. Last month, a Group of Ministers formed to decide the National Pharmaceutical Pricing Policy recommended that the weighted average price of all drug brands with over 1% market share in a segment should be fixed as the ceiling price of that particular drug. The move will bring prices of 348 essential drugs under government purview. The panel's proposals will be taken up by the Union Cabinet for approval.

Pharma Stocks Outlook for the week (12-16.11.2012)

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Aurobindo Pharma Ltd, which released its Jul-Sep earnings today, and Wockhardt Ltd, which is expected to announce its September quarter earnings on Nov 14, are two stocks that are likely to see action in the coming week. Aurobindo Pharma, gave positive results, and could see uptrend in its stock. Strong foreign exchange gains and robust growth in sales helped Aurobindo Pharma report Jul-Sep net profit of 2.38 bln rupees compared with loss of 418.8 mln rupees a year ago.

Results of those pharmaceutical companies such as Ranbaxy Laboratories and Cipla Ltd that have declared Jul-Sep results so far have already been factored in in their share price, so they are likely to see rangebound action next week. The pharma sector, however, as a whole, is set to outperform the broader market in the coming week following better-than-expected quarterly results for many of the companies. In coming days, focus would also be on likely decision by the government on the National Pharma Pricing Policy which will affect foreign pharmaceutical companies negatively, more than it would do to its Indian counterparts.

Last month, a Group of Ministers formed to decide the National Pharmaceutical Pricing Policy recommended that the weighted average price of all drug brands with over 1% market share in a segment should be fixed as the ceiling price of that particular drug. On Thursday, the Cabinet deferred a final decision on the same.

Pharma Stocks Outlook for the week (05-09.11.2012)

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Stocks of major pharmaceutical companies are likely to track their Jul-Sep earnings next week, and the counters of those announcing the quarterly result later will be in line with the broad market. Cipla Ltd is expected to post positive Jul-Sep earnings on Monday, riding on a robust growth in domestic sales and exports, and a weaker rupee, which should see its counter to react positively in the coming week.

Ranbaxy Laboratories, which is scheduled to release its September quarter earnings on Nov 8, is seen posting a net profit of 2.98 bln rupees backed by higher sales and market leadership in some of its drugs. However, profit booking may pull some pharmaceutical stocks down next week. The other companies scheduled to publish their earnings next week are Jubilant Life Sciences, Piramal Healthcare, Cadila Healthcare, Aurobindo Pharmaceuticals, Panacea Biotec, Plethico Pharma, and Natco Pharmaceuticals. The market will also keep an eye any development regarding the drug pricing policy, expected to be announced on Nov 24.
   
Growth in the sector is seen under pressure till the pricing policy details are out, and counters of multinational companies such as GlaxoSmithKline Pharmaceuticals, Pfizer Ltd and Abbott Pharmaceuticals are likely to take cues from the specifics outlined, India being one of their biggest market.
   
Last month, a Group of Ministers formed to decide the National Pharmaceutical Pricing Policy recommended that the weighted average price of all drug brands with over 1% market share in a segment should be fixed as the ceiling price of that particular drug. The move will bring prices of 348 essential drugs under government purview. The panel's proposals will be taken up by the Union Cabinet for approval.

Pharma Stocks Outlook for the week (29.10.2012 - 02.11.2012)

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The coming week is likely to be a mixed bag for pharmaceutical stocks, with stock-specific action likely. The drug pricing policy, expected on Nov 24, will be the only "hangover" for pharma stocks in the coming week. Growth in the sector is seen under pressure till the pricing policy details are out, and counters of multinational companies like GlaxoSmithKline Pharmaceuticals, Pfizer Ltd and Abbott Pharmaceuticals are likely to take cues from the specifics outlined, India being their biggest market.

Indian companies like Cipla Ltd and Cadila Healthcare are also likely to be impacted by the policy due to pricing restrictions; same goes for Ranbaxy Laboratories. Last month, a Group of Ministers formed to decide the National Pharmaceutical Pricing Policy recommended that the weighted average price of all drug brands with over 1% market share in a segment should be fixed as the ceiling price of that particular drug. The move will bring prices of 348 essential drugs under government purview. The panel's proposals will be taken up by the Union Cabinet for approval.

Counters of companies announcing their quarterly earnings will take cues from the results. Companies posting their Jul-Sep results over the week are--Dr Reddy's Laboratories on Oct 30, Glenmark Pharmaceuticals on Oct 30, and Shasun Pharmaceuticals on Nov 2. On the overseas front, the US Food and Drug Administration's approvals to Indian drug makers to market generic drugs in the world largest pharmaceutical market have been coming at a good pace.

Pharma Stocks Outlook for the week: 01.10.2012-05.10.2012

Stocks of pharmaceutical companies are seen trading range-bound with a negative bias next week following the Group of Ministers' proposal on the National Pharmaceutical Pricing Policy. The ministers' panel has finalised market-based weighted average prices for drug brands that enjoy more than 1% market share. The panel has included 348 drugs but has excluded combination drugs. According to the report, Indian companies that do not have a huge exposure to the domestic market would be insulated to some extent. The companies such as Dr. Reddy's Laboratories, Sun Pharmaceutical Industries, Lupin, Ranbaxy Laboratories and Cipla would be less impacted due to their presence in the exports space.

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Pharma Stocks Outlook for the week (24-28.09.2012)

Pharmaceutical stocks are likely to trade down next week as the meeting of Group of Ministers on National Pharmaceutical Pricing Policy remained inconclusive Thursday and investors do not see any positive trigger before the final call. Agriculture Minister Sharad Pawar, who also heads the ministerial panel, had said the committee will again meet next week and a final decision will be taken in 8-10 days. Currently, the panel is seeking data from emerging countries such as Brazil, China and Mexico to study their drug pricing formula.

According to Minister of State for Chemicals and Fertilisers Shrikant Kumar Jena, panel was also mulling the pricing formula suggested by the commerce and industry ministry. In May, the commerce ministry had recommended that the weighted average price of all drug brands that have more than 3% market share in a particular therapeutic segment should be fixed as the ceiling price of that particular drug.

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Pharma Stocks Outlook for the week: 17.09.2012 - 21.09.2012

Pharmaceutical stocks are likely to remain subdued next week on worries over the final decision on the National Pharmaceutical Pricing Policy, which would be taken for discussion by the group of ministers next week. The GoM would meet next week after the Supreme Court on Tuesday slammed the government for delay in finalising the policy.

The court has also and warned it would pass an interim order if no decision was taken on bringing 348 drugs under the National List of Essential Medicines price-control regime. If the policy is in place, then big companies are set to lose, as they will have to eventually lower their prices because their prices are at a 25-30% premium to those of Indian drugs.

This would also have an effect on the mid-scale companies as in order to stay in competition with the big multi-nationals, they will also have to cut down their prices. Investors would also keep an eye on the Reserve Bank of India's mid-quarter monetary policy on Monday.

Most market participants do not expect the central bank to cut the repo rate, the rate at which it lends to commercial banks, but are looking forward to know the tone of its commentary.

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Pharma Stocks Outlook: 10 - 14.09.2012

Mid-cap pharmaceutical stocks are seen gaining this week while large-caps are expected to trade in a narrow range due to lack of any major positive trigger. Most mid-cap stocks have been flat for the past few weeks and should have a good run this week. In case of large-cap stocks, most of them had a rally this week, they are expected to be range-bound this week with a negative bias. Among mid-cap stocks, Ajanta Pharma, Jubilant Life Sciences, Shasun Pharmaceuticals, and Torrent Pharmaceuticals look positive for this week.

Investor sentiment in the Shasun Pharma counter is seen positive as the company is expected to bag an overseas contract this week. In large-caps, Ranbaxy Laboratories Ltd may rise ahead of the launch of its anti-diabetic drug Diovan later this month. Talking about Lupin, he said the management looks upbeat at present, which is very positive for investors. Panacea Biotec yesterday said it would Tuesday announce a strategic collaboration with US-based Osmotica Pharmaceuticals.

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Pharma Stocks Outlook for the week (03.09.2012 - 07.09.2012)

Pharmaceutical stocks are likely to rise next week due to defensive nature of the shares amid a volatile broad market. Next week, benchmark indices will take cues from overseas markets with all eyes on US Federal Reserve Chairman Ben Bernanke's speech yesterday at Jackson Hole, but the bias may be negative.

Some stock-specific movements are also expected among pharmaceutical stocks. Stocks of Sun Pharmaceutical are seen gaining next week as the company said the US Food and Drug Administration has found its subsidiary Caraco's Michigan facility to be in compliance with the requirements of the consent decree. Caraco can now commence manufacturing operations at the facility. Clearance of the Michigan facility by the FDA is a marginal positive, in our view, and is in line with our expectations. Clearance would be granted on a product-by-product basis and we expect a gradual ramp up in manufacturing.

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Pharma Stocks Outlook for the week (27 - 31.08.2012)

Pharmaceutical stocks are seen gaining next week, bucking the trend in the broad market which is expected remain volatile following the expiry of the August derivatives series. As investors roll over their positions to the next month, most would prefer save havens like pharmaceutical stocks which are not seen as unstable as others. Sun Pharma continues to strike a balance between short-term opportunities and laying the foundation to drive sustainable growth in new orbits. Stocks of Glenmark Pharmaceuticals are seen gaining next week following the International Centre of Dispute Resolution's ruling in favour of the company on the arbitration claim it filed against Napo Pharmaceuticals.

Glenmark, among other things, was seeking a ruling for its exclusive rights to develop, commercialise and distribute diarrhoea treating drug Crofelemer in 140 countries. The development may prove to be a big boost for the company," brokerage Networth Capital said in a report. Next week the stock is seen facing a resistance at 420 rupees and finding support at 405 rupees. However, if the stock falls below the support level, a correction is seen in the 390-385-rupee level, a technical analyst with a domestic brokerage said. Shares of Ranbaxy Laboratories are seen giving up their gains by early next week on profit booking. The counters gained after the company received the US Food and Drug Administration's approval for withdrawing 27 abbreviated new drug applications.

Ranbaxy has withdrawn the ANDAs as part of the consent decree signed with the US FDA to resolve issues related to violations of good manufacturing practices. Avendus Securities said the lifting of the import alert on Dr Reddy's Laboratories' Mexico-based subsidiary by the US FDA was positive, but the brokerage did not expect any immediate earnings benefits for the company. Next week, the stock is seen facing resistance at 1,720 rupees and finding support at 1,630 rupees, the technical analyst said. Above the resistance level, the stock trend looked positive. Talking about the BSE Healthcare Index, he said it would be rangebound with a positive bias next week.

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Pharma Stocks Outlook for the week (21-24.08.2012)

Pharmaceutical stocks are seen trading in a narrow range next week due to lack of any major trigger. Pharmaceutical stocks have entered a consolidation mode. The stocks should remain at the current levels for some time and then move up again. As of now, I believe pharma stocks should be rangebound as we do not see anything big, positive happening in the next few days.

BSE Healthcare Index is currently trading sideways to positive and it would continue the trend next week as well. Talking about stock specific movements, Cipla is set to see some downside in the weeks to come due to a one-off gain in Apr-Jun.

The nearly 450 basis points improvement in the company's operating margin was a result of lower proportion of antiretroviral drugs and higher contribution from anti-depressant segment drugs like escitalopram, or Lexapro, coupled with higher realisations because of improvement in utilisation of the company's Indore unit.

Shares of GlaxoSmithKline Pharmaceuticals may see some downside next week as the company has stopped operations at its Thane factory, with all employees having opted for the voluntary retirement scheme offered by the company.

Shares of Ranbaxy Laboratories are seen gaining next week due to the launch of an anti-diabetic generic pioglitazone hydrochloride tablets in the US market. Shares of Ranbaxy are seen trading in a broad range of 470-525 rupees.

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Pharma Stocks Outlook for the week (13-17.08.2012)

Pharmaceutical stocks are seen outperforming the benchmark indices next week on news of drug approvals from the US Food and Drug Administration and also on anticipation of new approvals. Most pharmaceutical stocks have reported exceptionally well financial results in Apr-Jun, which is likely to help the stocks gain in the next few weeks. Dr Reddy's Laboratories to gain as the company has received the final approval for generic Topropl XL, which has a market value of $1.2 bln. We believe that the product will be a key contributor to Dr. Reddy's US business in the near term.    

Ranbaxy Laboratories' in-licensing agreement with Gilead's emtricitabine is seen positive for the stock. Stocks of Sun Pharmaceutical Industries are seen continuing with their gains next week after the company Friday reported better-than-expected quarterly net profit. During the reporting quarter, Sun Pharmaceutical reported a consolidated net profit of 7.96 bln rupees while its consolidated net sales were at 26.58 bln rupees. Sun Pharmaceutical Industries' shares are also seen gaining momentum next week on the company's likely acquisition of UK-based pharmaceutical company Stada.

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Pharma Stocks Outlook for the week (06 - 10.08.2012)

Apr-Jun earnings are seen influencing action in pharmaceutical stocks next week as many companies are set to detail their quarterly numbers in the coming week. Bullish on Divi's Laboratories and Cadila Healthcare that are reporting their Apr-Jun results on Saturday and Monday, respectively. Investors would also be looking at Aurobindo Pharma's earnings that will be detailed Tuesday. Stocks of Ranbaxy Laboratories are likely to gain next week on talks the company is set to launch a diabetes-treating drug Actos in the US market by mid-August. The company, in 2010, had resolved a patent litigation with Japan-based company Takeda Pharmaceutical Co whereby the latter had granted a non-exclusive royalty free licence to its US patents covering Actos to Ranbaxy. Sun Pharmaceutical Industries' stocks are also seen gaining momentum next week on the company's likely acquisition of UK-based pharmaceutical company Stada.
However, given the economic crisis in the eurozone region, it would be hard to turn the company around, which should be negative for Sun Pharmaceutical in the long run. So far, pharmaceutical companies have reported exceptionally well numbers in Apr-Jun with around 20% growth in domestic businesses and over 40% growth in the US businesses. Therefore, pharmaceutical stocks are seen outperforming the benchmark indices by around 10% over the next one month. However, stocks of Glenmark Pharmaceuticals may fall next week as the company's consolidated net profit for Apr-Jun fell sharply to 782.75 mln rupees from 2.08 bln rupees last year. This figure is lower than the 1-bln-rupee net profit the Street had expected, as the company suffered a marked-to-market loss of 550 mln rupees.

Pharma Stocks Outlook for the week (30.07.2012 - 03.08.2012)

              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.

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Pharma Stocks Outlook for the week (16-20.07.2012)

Pharma Stocks Outlook for the week (16-20.07.2012)

Stocks of pharmaceutical companies are seen trading in a range-bound manner next week. However, investors will eye Dr Reddy's Laboratories Ltd's Apr-Jun result to be detailed on Thursday. Sequentially, the company's net profit is seen rising 3% while its net sales are likely to fall by 4% over the Jan-Mar quarter.

In the next few trading sessions, shares of Cipla Ltd are seen trading with a positive bias and investors with a long horizon may enter the stock at around 332 rupees, with a target of 355 rupees. Near-term support for the stock is seen at 325 rupees.

Apart from stock-specific movement, the sector will take cues from the broader market in the next five trading sessions. India's wholesale price inflation for June, which will be detailed on Monday, is likely to set the mood for the domestic indices. Investors will also eye the Apr-Jun earnings of companies.