Pharma Stocks Outlook: Seen up next week as defensive bet

[B. Karthick]

Pharma Stocks Outlook: Seen up next week as defensive bet
Saturday, Sep 6

Shares of pharmaceutical companies are seen up next week because
investors may buy them as defensive bet in a broad market that is
seen weak.
However Ranbaxy, Cipla and Dr Reddy's Laboratories are seen weak on
the
charts.
This week, Ranbaxy plunged 13% after Daiichi's open offer for its
shareholders ended on Thursday.
The weakness in Ranbaxy is likely to see index funds shifting to
other
stocks like Sun Pharmaceutical Industries.
Shares of Sun Pharmaceutical Industries, up 1.9% this week, are seen
rising further next week, according to the charts.
Among other shares, Dr Reddy's Laboratories may move sideways, while
Cipla looks weak.
Fundamentally, the shift could also be seen towards mid-cap stocks.
The BSE Healthcare Index weakened more than the broad indices this
week,
down 1.3%, mainly because of Ranbaxy.
For the 1-year period till date, Sensex has shed 30%, while the
healthcare
index has fallen by a meagre 3%.
Hence, the upside in pharmaceutical shares is seen capped going
forward.
In mid-cap segment, Piramal Healthcare, Alembic, and Glenmark Pharma
may
be in the limelight.

Closing prices, in rupees, of leading pharmaceutical shares, on
National
Stock Exchange Friday, compared with a week ago:

Company Sep 5 Aug 29 %
Change

Cadila Healthcare 333.20 323.35
3.1
Cipla 233.45 240.05 (-)
2.7
Dr Reddy's Laboratories 584.65 579.15
1.0
GlaxoSmithKline Pharmaceuticals 1,177.10 1,175.65
0.1
Pfizer 560.20 587.00 (-)
4.6
Ranbaxy Laboratories 450.70 518.80
(-)13.1
Sun Pharmaceutical Industries 1,500.25 1,472.30
1.9

BSE Healthcare Index 4258.04 4311.73 (-)
1.3
Nifty 4352.30 4360.00 (-)
0.2
Sensex 14483.83 14564.53 (-)
0.6

End

B.Karthick
Research Analyst.