The Indian stock market continues trading on a strong note with Sensex is up 273.50 points or 0.72 percent at 38344.63, and the Nifty jumped 78.60 points or 0.7 percent at 11281.50.
Among the sectors, the pharma index gained over 2 percent led by Dr Reddy's Labs which spiked over 4 percent hitting news 52-week high of Rs 4,447.80 per share.
The company on July 29 reported a 12.6 percent year-on-year (YoY) drop in consolidated net profit at Rs 579 crore for the quarter ended June 2020. The profit in the corresponding quarter of last fiscal stood at Rs 662.8 crore. Revenue from operations during Q1FY21 stood at Rs 4,418 crore, up 15 percent YoY.
It was also the top Nifty gainer with the stock being one of the most active stocks on NSE in terms of value, 23,18,085 shares are being traded at 10:33 hours.
The other gainers included Divis Labs which gained 3 percent followed by Torrent Pharma, Lupin, Cadila Healthcare, Cipla and Aurobindo Pharma.
Pharma stocks have witnessed a brief halt/pullback towards short term moving averages, however, the trend is still positive. Some of the players have started their next up leg, said Umesh Mehta, Head of Research, Samco Group.
He recommends a buy on Lupin with target at Rs 980. The stock seems to have found cushion at Rs 850 levels and now seems to be getting ready for more upside.
He also has a buy on Ajanta Pharma with target at Rs 1,600. The stock has also seen a price rejection on the downside near crucial moving averages on the weekly chart. The stock has strong definitive support at Rs 1,330, he said.
Research and broking firm, ICICI Securities expects outperformance from pharma stocks including Dr Reddy's Labs, Aurobindo Pharma and Ipca Labs and has buys on Sun Pharma and Ajanta Pharma.Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.