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Analysts give hot pharma picks for 2006
Pharma analysts tell Moneycontrol that cut in excise duty, a liberal new drug policy in April, drugs worth USD 25 billion coming off patent in 2006 and a USD 27 billion CRAMS market by 2010 will augur well for both domestic and MNC pharma companies.
My best pick from this sector for 2006 is Dishman Pharmaceuticals
My best pick from this sector for 2006 is Dishman Pharmaceuticals . While operating margins are well over 30%, the company is also the first one to get patent in molecules from Solvay under the CRAMS - contract research and manufacturing and services - systems. The company bagged its first contract for manufacturing bulk drug Eprosartan Meslyate - The molecule is still under patent - and is a key intermediate for Solvay's anti-hypertensive drug Teveten. This is expected to be a key growth driver for the company in the near term.
The company has got 6-7 long-term contracts from reputed pharma MNCs
On the basis of this contract other pharma MNCs like Astra Zeneca , Glaxo Pharma and Merck have given contract to Dishman. The company has got 6-7 long-term contracts from reputed pharma MNCs leading to strong visibility. The stock is likely to touch Rs 240-250 levels in about 12-months. JB Chemicals is yet another stock that works on the CRAMS model and can give 20-25% returns in about a year.
Rahul Sharma, Karvy Stock Broking
The year 2006 will be good for the Indian pharma companies
The year 2006 will be good for the Indian pharma companies as lot of patents are expiring this year and the new drug policy to be announced in April is likely to be more liberal than the current regime. These two factors will benefit Indian as well as MNC pharma companies alike.
Price realizations in generics from the developed markets will also improve
Better price realizations in generics from the developed markets will also improve to some extent. Most of the companies in this sector are likely to do quite well this year considering their underperformance in 2005.
