Drug makers in India to sustain 'premium' valuations: HSBC

HSBC raises target prices for some Indian drug makers saying "robust" earnings will help sustain the "premium" valuations in the sector.

HSBC says India's pharmaceutical sector is benefitting from US launches, while the weaker rupee lifts margins. HSBC raises its target price for Sun Pharma to Rs 770 from Rs 670, while also raising them for Cipla, Divi's Lab, Ipca Lab, Ranbaxy Laboratories and Cadila Healthcare . The bank says it prefers Dr Reddy's Labs, Sun Pharma and Cipla among the large caps. The NSE's pharma index is up 22.7% this year, outperforming the Nifty which is up 17.32%. Ranbaxy shares gain 2.4%, Sun Pharma adds 1.3% while Cipla gains 1.1%.