Pharma Stocks Outlook for the week – 11 to 15.01.2016
(To
rebound next week, mood remains cautious)
( www.rupeedesk.in )
Pharmaceutical
stocks are likely to rebound next week, we remain
cautious
about the sector as regulatory issues continue to weigh on
sentiment.
Everybody is cautious about pharma stocks now because of
regulatory
issues. Since November, Dr Reddy's Laboratories Ltd, Sun
Pharmaceutical
Industries Ltd, and Cadila Healthcare Ltd have received
warning
letters for their facilities.
Weakness
in the broad market also contributed to the downfall as all
pharmaceutical
stocks declined this week. The decline, though, brings the
probability
of a rebound.
The
rebound in the sector's stocks will also depend on the movement in
the
broad market, which will be directed by Oct-Dec results of
heavyweights
such as Hindustan Unilever Ltd, Infosys Ltd, and Tata
Consultancy
Services Ltd.
Oct-Dec
earnings of pharmaceutical companies will also be in focus as
traders
and investors take positions based on the earnings previews.
Post
the warning letter, usually the delay in future ANDA (Abbreviated
New
Drug Application) approvals as well as remediation costs have a
cascading effect on companies.