Pharma shares in demand; Cipla, Laurus Labs, Dr Lal Pathlabs hit new highs

Topics Buzzing stocks | Markets | Cipla

Shares of pharmaceutical, including healthcare facilities companies, were in demand at the bourses on Monday, with the S&P BSE Healthcare index hitting a new high after the government banned export of antiviral drug, Remdesivir (injection and API both) in order to address increased demand in view of rising Covid-19 cases in the country.

The domestic manufactures of the drug include Cipla, Cadila Healthcare, Dr Reddy's, Sun Pharma, Jubilant, Syngene (API), Divis Laboratories (API) among others.

Cipla and Laurus Labs from the pharmaceuticals and Dr Lal Pathlabs and Metropolis Healthcare from the healthcare facilities sector hit their respective record highs on the BSE in intra-day trade. Besides these stocks, Ipca Laboratories, Torrent Pharmaceuticals, Dr Reddy’s Laboratories, Divis Laboratories and Neuland Laboratories were up more than 2 per cent each.

At 10:34 am, the S&P BSE Healthcare index, the sole sectoral gainer, was up 1.3 per cent, as compared to 2.7 per cent decline in the S&P BSE Sensex. The S&P BSE Healthcare index hit a record high of 23,047 points in intra-day trade today.

Indian pharma, having delivered >40 per cent return in the first phase of covid, went into healthy correction (strong earnings) as the market saw a gradual flight of investment allocation to cyclicals/industrials, driven by the opening up of the economy, and a broad-market rally.

However, analysts at Phillip Capital believe that it is not over for the Indian pharma – and that it is all set for a sectoral value upgrade, led by a robust exports opportunity, supply chain de-risking by global pharma from China, strategic end-to-end integration, or led by Production Linked Incentive (PLI) schemes, enhanced specialty drug efforts, and recovery of global pharma demand post covid. Also, the covid-led opportunities could be a catalyst in the near term.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel