Pharma stocks declined in October 10 trade with the Nifty Pharma index falling over 2 percent on Thursday. Market observers said the decline was mainly because of the unwinding of long positions due to recent highs in the defensive stocks and the broader market.
The pharma index fell 529.2 points to its day's low of 23,254.60, declining 2.22 percent. At around 2.45 pm on October 10, the index was down 2.14 percent with Lupin, Torrent Pharma, Cipla and Alkem Laboratories among major laggards.
"Stocks such as Divi's Laboratories, Glenmark and Lupin have seen long unwinding in the derivatives segment. Such reversals generally indicate a bull trap situation which could lead to further unwinding of positions in the near term," said Ruchit Jain, Lead - Research, 5Paisa.com.
Lupin shares dropped to an intraday low of Rs 2,112 per share on the NSE, down 7.61 percent. The scrip fell after two days of consecutive gain. At the time of publishing, the stock was trading at Rs 2,154.90 apiece, declining 5.74 percent.
Shares of Ahmedabad-headquartered Torrent Pharmaceuticals shares dropped as low as 4.25 percent to its day's low of Rs 3,405.95 apiece on the NSE, while Cipla was down nearly 4 percent to Rs 1,615.35 per share. The scrip fell three days of consecutive gain.
Alkem Laboratories shares were trading at Rs 6,141.25 per share on the NSE, down 2.43 percent at around 3 pm. Aurobindo Pharma and Sun Pharmaceutical were others in the index that fell up to 2 percent.
The Nifty Pharma index has so far this year gained 54.42 percent while the benchmark Nifty advanced 26.94 percent in the same period.
Sharekhan, in its recent note, said the Indian pharmaceutical industry is poised for significant growth in 2024, fueled by the success of specialty products like gRevlimid, gSpiriva, and gMyrbetriq, which are driving revenue for major players such as Dr. Reddy’s, Cipla, and Sun Pharma.
However, challenges remain, including margin pressures for Aurobindo Pharma and Dr. Reddy’s, due to rising R&D costs and increased regulatory scrutiny following their Q1FY2025 earnings reports.
Despite these hurdles, the outlook for the industry is optimistic, with analysts identifying key investment opportunities in Sun Pharma, Zydus Lifesciences, and Lupin, all expected to drive growth through innovation and market expansion, ultimately benefiting the broader healthcare landscape, the research report said.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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