Pharma Stocks Outlook: Seen down next week; Ranbaxy to be in focus

[K.Karthik Raja]

Pharma Stocks Outlook: Seen down next week; Ranbaxy to be in focus

Shares of pharmaceutical companies are likely to remain weak next
week but Ranbaxy Laboratories is likely to buck the trend.
Ranbaxy is the only stock that is likely to gain next week.it is
likely
to face resistance at 405-432 rupees and find support at 366-353
rupees.
Ranbaxy's board is slated to meet Tuesday to consider the demerger
of its new drug discovery research unit.
The details of the hive-off of its R&D unit could drive the stock.
The Ranbaxy stock ended at 396.75 rupees on National Stock Exchange
today, up 4.37% from Thursday. It touched a high of 399 rupees and a
low of 375 rupees earlier in the session.
Pharmaceutical shares are largely undervalued and have the
potential to move up.
However, analysts rule out the Union Budget for 2008-09 (Apr-Mar)
helping the sector to fetch better value in the stock market via
tariff and other incentives.
The industry has sought cuts in excise and customs duties and a
reduction in fringe benefit tax. It is also hopeful of getting tax
benefits for drug R&D.
Sun Pharma is likely to be range-bound with a negative bias. It is
seen in the band of 1,026-1,174 rupees.
GlaxoSmithKline Pharma is seen finding support at 800 rupees and
facing resistance at 1,116 rupees.
Cipla may get first support at 178 rupees and the second at 146
rupees. Its resistance is seen at 188 rupees.
Cadila Healthcare is seen in the range of 235-270 rupees, while
Pfizer may find support at 505-581 rupees and face resistance at
603-634 rupees.
BSE Healthcare Index is also seen weak, Iyer said. He sees the
index getting support at 3466 points and facing resistance at
3788-3815. Today, it ended at 3691.84, up 1.6% from a week ago.
The movement in pharmaceutical shares next week would largely
depend on the broad market.

Friday's closing share prices, in rupees, of leading pharmaceutical
companies on National Stock Exchange, compared with a week ago:

Company Feb 15 Feb 8 %
Change

Cadila Healthcare 250.05 246.90
1.3
Cipla 184.15 194.65 (-)
5.3
Dr Reddy's Laboratories 543.80 516.05
5.4
GlaxoSmithKline Pharmaceuticals 928.55 927.35
0.1
Pfizer 623.15 640.00 (-)
2.6
Ranbaxy Laboratories 396.75 381.70
3.9
Sun Pharmaceutical Industries 1,113.85 1,119.10 (-)
0.5

BSE Healthcare Index 3691.84 3633.61
1.6
Nifty 5302.90 5120.35
3.5
Sensex 18115.25 17464.89
3.7

K.Karthik Raja
www.kences.blogspot.com