Pharma Stocks Outlook for the week: 17.09.2012 - 21.09.2012

[rupeedesk]

Pharmaceutical stocks are likely to remain subdued next week on worries over the final decision on the National Pharmaceutical Pricing Policy, which would be taken for discussion by the group of ministers next week. The GoM would meet next week after the Supreme Court on Tuesday slammed the government for delay in finalising the policy.

The court has also and warned it would pass an interim order if no decision was taken on bringing 348 drugs under the National List of Essential Medicines price-control regime. If the policy is in place, then big companies are set to lose, as they will have to eventually lower their prices because their prices are at a 25-30% premium to those of Indian drugs.

This would also have an effect on the mid-scale companies as in order to stay in competition with the big multi-nationals, they will also have to cut down their prices. Investors would also keep an eye on the Reserve Bank of India's mid-quarter monetary policy on Monday.

Most market participants do not expect the central bank to cut the repo rate, the rate at which it lends to commercial banks, but are looking forward to know the tone of its commentary.

By RUPEE DESK

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