Pharma Stocks Outlook for the week – 28.12.2015 to 01.01.2016
Range
bound; stock-specific movement likely
( www.rupeedesk.in )
Stocks
of pharmaceutical companies are seen trading range bound next week, with
news-driven,
stock-specific movement expected. Trading volumes are likely to be thin
because
of year-end holidays, and Volatility is expected on account of expiry of the
derivatives
contracts on Thursday. Among large cap stocks, Sun Pharmaceutical
Industries
is seen trading sideways, while Dr Reddy's Laboratories may see a rebound
after
the sharp fall in the past few weeks.
Though
there is an overhang of regulatory issues at Sun Pharma's Halol unit after the
US
Food and Drug Administration issued a warning letter last week, there could be
buying
interest at dips in the stock as valuations are favourable. In the midcap
space,
analysts
are positive on Aurobindo Pharma, Alembic Pharmaceuticals and Biocon in
the
medium term.
After
the 5% rise in Aurobindo Pharma's stock this week, there would be some
consolidation
in the near term but the overall trend is strong given the robust US
pipeline.
Aurobindo Pharma defies the industry trend of slower US approvals, with
the
company bagging 33 product approvals so far in the current financial year
started
April.
Wockhardt, which fell 4% this week on reports of the US FDA issuing a Form
483
on its Ankleshwar unit, may remain under stress in the near term. The trend of
midcaps performing better than large caps may
continue in the coming week as well.