Dissapointing performance by these pharma majors for the year ended December 1998 has set the stocks rolling back. However, on Thursday, encouraging performance by Glaxo, Cadburys and Burroughs Wellcome have restored some confidence in the stocks in these sectors.

The losses in the pharma and FMCG stocks in the past week have been in the range of 5.5 per cent to a high of 18 per cent. The worst case has been that of Knoll Pharmaceuticals. The scrip, after witnessing a stupendous rise of 38 per cent from Rs 522 to a high of Rs 722, dropped back to Rs 696, a drop of 18 per cent in just a few sessions.

Knoll Pharmaceuticals registered amarginal rise of 3.5 per cent in turnover to Rs 252.37 crore for the year ended December 31, 1998 as compared with Rs 243.84 crore in 1997. Net profits for the period fell sharply by 46 per cent to Rs 27.05 crore from Rs 49.95 crore in the previous year. Although the steep fall in bottomline was also contributed by extraordinary items, the market market has ignored a dividend of Rs 6.50 per share by Knoll Pharmaceuticals.

Analysts feel that strong earnings growth by these corporates is likley to see a fresh wave of buying in a few select pharma and FMCG counters. The market is likely to define new discounting for these stocks after the latest results. Discouraging perfromance by Smithkline Beecham Pharma and Knoll Pharmaceutical has surprised analysts, but they feel that these scrips too are likley to attract investment buying once the panic is over.

Glaxo's scrip in the intra-day trade on Thursday had dropped to a low of Rs 692. However, encouraging performance pulled the stock back to a high of Rs 732before closing the day at Rs 721 on the Bombay Stock Exchange.

Glaxo India registered a 20.6 per cent increase in profit after tax (but before exceptional items) at Rs 67.12 crore, while gross sales at Rs 862.89 crore improved by 13.9 per cent (excluding the sales of the products of the Biddle Sawyer group of companies) compared with Rs 757.85 crore in the previous year. Net profits (after exceptional items) jumped by 110.3 per cent to Rs 86.63 crore, essentially due to a Rs 19.50 crore inflow following the sale of the company's Delhi branch office. Nil exceptional items in the form of voluntary retirement schemes (VRS) further aided the spurt in net profit. Last year, Glaxo's net profits were affected to the tune of Rs 14.47 crore on account of payments made under VRS and other retirement benefits.Burroughs Wellcome, on the other hand, recorded a 38 per cent increase in net profits at Rs 24.90 crore and an eight per cent increase in net sales at Rs 203.16 crore for the year ended December 31, 1998. Theencouraging performance pushed the stock up from Rs 819 to Rs 834. The scrip in the past few days had sropped from Rs 860 to Rs 819.

Prior to the slide set off from the week started from Monday, the gains in the first two weeks of February were as high as 39 per cent. Rhone Poulenc had shot up from Rs 987 to a high of Rs Rs 1373 before slipping to settle at Rs 1200. Pfizer, before dropping by 6 per cent to Rs 951, had shot up from Rs 855 to Rs 1017.