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D-Street Buzz: Pharma stocks edge higher led by Aurobindo Pharma; Sun Pharma, Dr Reddy's rise

The pharma index was trading a percent higher, while the Sensex was down 6.14 points at 55,942.96 and the Nifty was up 12.80 points at 16649.70

August 27, 2021 / 10:59 AM IST
BKM Industries | The company has sold 13,83,103 equity shares in BKM Industries via open market transaction, reducing shareholding to 5.29 percent from 7.4 percent earlier.

BKM Industries | The company has sold 13,83,103 equity shares in BKM Industries via open market transaction, reducing shareholding to 5.29 percent from 7.4 percent earlier.

The Indian stock market was trading flat on the morning of August 27 following weak global cues ahead of Fed chief Jerome Powell’s much- awaited speech later in the day at the annual Jackson Hole economic conference.

The Sensex was down 6.14 points or 0.01 percent at 55,942.96, and the Nifty had added 12.80 points, or 0.08 percent, at 16649.70.

Among sectors, the pharma index added over a percent led by Aurobindo Pharma and Sun Pharma, which added over a percent each followed by Dr Reddy's Labs, Cadila Healthcare, Biocon, Divis Labs and Cipla.

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Aurobindo Pharma was in focus after the company's subsidiary received US Food & Drug Administration (USFDA) approval for Cyclophosphamide injection used in the treatment of cancer.

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Its subsidiary Eugia Pharma Specialities received a 505(b)(2) NDA approval from the US regulator for Cyclophosphamide Injection 500 mg/2.5 mL and 1 g/5 mL vials, a press release said.

Even though the Q1FY22 numbers of the pharma sector were largely in line with expectations, they failed to cheer the market as there was some growth, margin-related pressure.

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"Expectations were high in terms of earning but most of the earnings were in line or missed the estimates. The major problem for most of the pharma companies was commentary from the management about concern over pricing pressure in their US business," said Santosh Meena, Head of Research, Swastika Investmart.

Also read: Pharma sector under the weather, analysts share their stock picks

Brokerage firm Anand Rathi Share and Stock Brokers expect the most growth- and margin-related challenges to persist in Q2FY22.

"We expect sales of the companies we cover to grow 12.3 percent/13.3 percent in FY22/FY23, driven by growth rebounding in the domestic market and launches in the US, while EBITDA and PAT may grow 6.7 percent/20.3 percent and 4 percent/23 percent in FY22/FY23," said Anand Rathi.

Disclaimer: The views and investment tips expressed by experts on moneycontrol.com are their own, and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Sandip Das
first published: Aug 27, 2021 10:59 am
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