Pharma Stocks Outlook: Seen weak tracking broad market next wk
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B. Karthick
Jun 28, 2008, 4:15:15 AM6/28/08
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Pharma Stocks Outlook: Seen weak tracking broad market next wk
Saturday, Jun 28.
Shares of pharmaceutical companies are seen weak tracking the
broad market next week.
Bombay Stock Exchange Healthcare index this week fell in line with
the broad market and the trend is seen continuing.
While the broad index market fell over 20% in the past two months,
the BSE Healthcare Index had declined just 4%.
While pharma shares were not part of the broad market rally
earlier
during the year, they now look expensive compared with the frontline
shares of other sectors.
Cipla, for example, is trading at 20 times its one-year forward
earnings, while the benchmark indices are at 14 times.
The stock looks weak with support at 195 rupees next week.
Among other drug company shares that are seen weak are Dr Reddy's
and Ranbaxy with support at 611 rupees and 490 rupees, respectively.
Pharmaceutical shares are insulated from inflation concerns, as
their
substantial revenue come from exports. So, new funds entering the
market will find them as safe bets.
Sun Pharma does not look weak on charts and could see a bounce-back
with support at 1,270 rupees.
This week, the stock lost over 8% on fear the company's hostile
acquisition of Taro Pharma may result in an extended legal battle.
GSK Pharmaceutical and Glenmark could be the other shares that may
witness buying with support at 1,086 rupees and 540 rupees,
respectively.
Closing prices, in rupees, of leading pharmaceutical shares on
National Stock Exchange today, compared with a week ago:
Company Jun 27 Jun 20 %
Change
Cadila Healthcare 310.00 320.10 (-)
3.2
Cipla 210.75 212.10 (-)
0.6
Dr Reddy's Laboratories 657.25 655.05
0.3
GlaxoSmithKline Pharmaceuticals 1,125.95 1,115.05
1.0
Pfizer 572.50 597.70 (-)
4.2
Ranbaxy Laboratories 523.50 542.35 (-)
3.5
Sun Pharmaceutical Industries 1,341.25 1,460.35 (-)
8.2
BSE Healthcare Index 4150.05 4325.40 (-)
4.1
Nifty 4136.65 4347.55 (-)
4.8
Sensex 13802.22 14571.29 (-)
5.3
End
B.Karthick,
Research Analyst
Saturday, Jun 28.
Shares of pharmaceutical companies are seen weak tracking the
broad market next week.
Bombay Stock Exchange Healthcare index this week fell in line with
the broad market and the trend is seen continuing.
While the broad index market fell over 20% in the past two months,
the BSE Healthcare Index had declined just 4%.
While pharma shares were not part of the broad market rally
earlier
during the year, they now look expensive compared with the frontline
shares of other sectors.
Cipla, for example, is trading at 20 times its one-year forward
earnings, while the benchmark indices are at 14 times.
The stock looks weak with support at 195 rupees next week.
Among other drug company shares that are seen weak are Dr Reddy's
and Ranbaxy with support at 611 rupees and 490 rupees, respectively.
Pharmaceutical shares are insulated from inflation concerns, as
their
substantial revenue come from exports. So, new funds entering the
market will find them as safe bets.
Sun Pharma does not look weak on charts and could see a bounce-back
with support at 1,270 rupees.
This week, the stock lost over 8% on fear the company's hostile
acquisition of Taro Pharma may result in an extended legal battle.
GSK Pharmaceutical and Glenmark could be the other shares that may
witness buying with support at 1,086 rupees and 540 rupees,
respectively.
Closing prices, in rupees, of leading pharmaceutical shares on
National Stock Exchange today, compared with a week ago:
Company Jun 27 Jun 20 %
Change
Cadila Healthcare 310.00 320.10 (-)
3.2
Cipla 210.75 212.10 (-)
0.6
Dr Reddy's Laboratories 657.25 655.05
0.3
GlaxoSmithKline Pharmaceuticals 1,125.95 1,115.05
1.0
Pfizer 572.50 597.70 (-)
4.2
Ranbaxy Laboratories 523.50 542.35 (-)
3.5
Sun Pharmaceutical Industries 1,341.25 1,460.35 (-)
8.2
BSE Healthcare Index 4150.05 4325.40 (-)
4.1
Nifty 4136.65 4347.55 (-)
4.8
Sensex 13802.22 14571.29 (-)
5.3
End
B.Karthick,
Research Analyst
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