Mumbai, May 22: After infotech stocks, it could now be the turn of pharma scrips. Punters see a steady rise in pharma scrips in the coming days. The market sees pharma companies insulated from recession, besides the dominance of MNCs in the industry. This also makes this a more investor-friendly sector and many counters in this sector are FII favourites. Analysts expect most companies in this sector to do very well and declare quite good results as compared to last year. The trend is clearly evident in the price movements of most pharma stocks.Glaxo has been seeing large volumes over the last few days. The scrip was quoting at Rs 415.50 on Thursday. Since the beginning of the year, Pfizer has appreciated by nearly 100 per cent to the current level of Rs 659.50. SmithKline Beecham Pharma has moved from Rs 536 on January 1 to the current levels of Rs 804 while Burroughs Wellcome is still on the rise, the prices have moved from Rs 355.50 to Rs 385 levels in the last few trading sessions.
Nicholas Piramalquoting at around Rs 415 has been hovering near its 52-week high of Rs 426. Cipla and Orchid Chemical have been moving up on the news of their discovery of alternate process to manufacture the wonder drug Viagra.Orchid has been hitting the circuit in the last few trading sessions at Rs 112.60 while Cipla was trading at Rs 825.50 on Thursday. Kopran has also been in the limelight following the restructuring of its operations.
Research analysts expect the prices to move further since they are anticipating this sector to grow by 20 per cent on an average in the coming year.
The domestic manufacturers, especially formulators, are also doing quite well, following consolidation/acquisition of some brands. Sun Pharma has taken over two pharma companies over the last one year. Ranbaxy is still consolidating its brands after the takeover of Vorin Laboratory and Crosland Research. This will reflect in the results in the later half of the year. Likewise, the recent acquisitions by Wockhardt of Merind are alsoexpected to give a boost to the companies' bottomline.
Besides, some domestic companies have been concentrating on new drugs. Indian companies have an advantage over the multinational companies (MNCs) since it is easier for them to produce the patented molecules.
MNCs have to undergo a lot of regulatory problems in manufacturing any of their patented molecules in India. They concentrate on bulk drugs production more than new drugs. The industry is not expecting much sops from the budget. The industry has asked for a hike in the current prevailing customs duty of 30 per cent. They are also seeking a reduction in excise duty cut on bulk drugs from 18 per cent to 13 per cent while on the formulations it is seeking a reduction from 15 per cent to 8 per cent.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
