Pharma Stocks Outlook: Range-bound next week; Ranbaxy down

[naresh0...@yahoo.co.in]

Pharma Stocks Outlook: Range-bound next week; Ranbaxy dn
Friday, Apr 11

Solrex Pharmaceutical Company's acquisition of Orchid Chemicals'
shares through block deals brought the largely underperforming
pharmaceutical sector into limelight this week on renewed talk of
consolidation in the sector.
yet, this may have little impact on pharmaceutical company shares
next
week with most of them seen range-bound on thin volumes in the absence
of
major triggers. Ranbaxy, which reportedly has links with Solrex, is
seen weak on charts
and may see profit booking.
The stock had given good value in the past but was in for some
profit
booking this week which may continue further into next week.The stock
may test its support level, next week, which is seen at 425 rupees,
seen at 480 rupees.believes that shares of Ranbaxy and Glenmark
Pharmaceuticals may find some buying interest, as they are defensive
stocks.In a weak market people may park their money in such defensive
stocks.
Cipla is seen stable next week with resistance likely at 225
rupees.Cadila Healthcare and Glaxosmithkline are likely to witness
only sideways movement with very thin volumes.
We expect Cadila to test its resistance level at 300 rupees while
support is seen at 250 rupees.
The company is likely to take some hit due to substantial dip in
profits from Pantaprazole, its top profit earner, Pantoprazole was
genericised in January this year, opening the market for
other companies to get in. However valuations are cheap and the joint
venture with Hospira may offset Pantoprazole losses
Resistance for GlaxoSmithKline shares is likely at 1,040 rupees
and has strong support at 900 rupees.
The sector is expected to register growth of 14% in 2007-08 and a
goodshow in earnings will revive buying interest in the sector. At
current levels, Sun Pharmaceuticals and Glenmark are attractively
valued.Most pharma stock have been battered during the recent market
fall andare attractively valued. Possible M&A play could be the next
trigger for pharma stocks.However the impact is likely to be
selective. Contract research and manufacturing is also a good space to
be in. Sun Pharmaceuticals' shares will see support at 1,200 rupees
and resistance at 1,300 rupees.
Bombay Stock Exchange's healthcare index bounced 1.8% this week
compared
with a fall of 0.2% last week, but trailed the Sensex and Nifty, which
rose3% and 2.8% respectively.
.
Closing share prices, in rupees, of leading pharmaceutical
companies on
National Stock Exchange, on Friday, versus a week ago:
.
Company Apr 11 Apr 4 %
Change
.
Cadila Healthcare 269.00
250.45 7.4
Cipla 213.95
213.05 0.4
Dr Reddy's Laboratories 591.05 598.40
(-) 1.2
GlaxoSmithKline Pharmaceuticals 975.35
974.30 0.1
Pfizer 674.50
672.35 0.36
Ranbaxy Laboratories 444.80
458.80 3.1
Sun Pharmaceutical Industries 1,273.90
1,241.15 2.6
.
BSE Healthcare Index 3919.27
3845.83 1.9
Nifty 4777.80
4647.00 2.8
Sensex 15,807.64
15343.12 3.0
.
End
.