Report Prepared by: Nabarupa Kanjilaal
Is Pharma Sector A Safe Haven In The Falling Market?
The Pharma sector has made higher highs and lower lows
in a period of one year owing to various factors at play.
Around the Globe
On 23rd June 2016, putting all the anticipations to rest,
the United Kingdom finally decided to leave the European
Union. In the following days, pound declined drastically
against the dollar. This in turn gave a huge jolt to the major global economies.
The leaders of the drug industry of Europe expressed their fear that Brexit would
create confusion; particularly over drug regulation and market access before the
event and soon after Brexit those fears became reality. The UKs main industry
association declared this creates immediate challenges for future investment,
research and jobs in our industry.
The turmoil and uncertainty that resulted from Brexit, shook the very root of most
of the sector and left the pharma sector in a state of confusion across the globe.
India in the middle
India is expected to be the third largest market for pharmaceuticals by the year
2020 in terms of incremental growth. India's filing of Drug Master Files's (DMF's)
with USFDA as of December 2013 totals to 3411. This is the DMF highest filed by
any country in the world. Total export of Drugs, Pharmaceuticals by India for the
year 2013-14 at USD 15,095 million, saw a record growth rate of 2.5 per cent over
the corresponding period of previous years.
Last 12 Months of Pharma
The Nifty Pharma Index fell from a high of 13489 in October 2015 to 10335
approximately in the end of June, post Brexit. However in the last two months the
index showed some signs of recovery.
Movement post budget
Post budget the index have given a positive return of 5.86 per cent against the
26.13 per cent movement by NSE benchmark Index Nifty. The last there months,
however, have seen a return of 10.9 per cent. But no matter what, Pharma is has
given the least return after the Nifty IT Index.
SL
SYMBOL
1
2
3
4
5
6
7
8
9
10
11
NIFTY IT INDEX
NIFTY PHARMA INDEX
NIFTY
NIFTY FMCG INDEX
NIFTY ENERGY INDEX
NIFTY MEDIA INDEX
NIFTY FINANCE INDEX
BANK NIFTY
NIFTY AUTO INDEX
NIFTY METAL INDEX
NIFTY REALTY INDEX
1D
0.5
-0.99
-0.96
-2.08
0.7
-1.33
-1.04
-0.84
-1.52
-1.99
0.61
1W
-2.25
2.28
0.65
-0.38
1.73
-0.31
1.07
1.82
2.45
1.41
5.84
1M
3M
6M
1Y
-7.91
4.02
3.4
4
4.35
3.12
8.07
8.57
7.74
4.53
1.61
-8.35
10.9
8.53
9.66
13.12
13.2
14.63
13.56
18.54
23.34
15.25
-4.94
1.68
18.44
19.08
19.41
27.04
30.99
33.36
33.96
39.5
43.1
-9.7
-4.03
13.85
17.59
28.28
25.67
22.12
21.98
30.77
45.28
31.32
Movt
Post
Budget
-1.64
5.86
26.13
24.02
25.35
33.47
43.62
46.8
43.75
60
64.99
The most active shares of the sector
Piramal Enterprises has given the best return in the last 1 year by giving a huge
movement of 115.83 per cent. In the last trading session, we have seen that the
stock has given a little correction and has dropped 1.75 per cent. On 9th September
2016, Piramal Enterprises share price closed at Rs 1,870.35 apiece on NSE. Owing
to the strong fundamental Piramal Enterprises is recommended as a multibagger
stock by Dynamic Levels research team.
The next best performer of the lot is Divis Lab. Since Budget the share gave a
movement of 41.76 per cent. Divis lab is one of the Top 500 shares suggested by
Dynamic Levels. Divis lab share price 1,324.15, down by 0.64 per cent on NSE in
the last trading.
Though Cipla shows to be in the red zone in last one year, we can see that it
recovered since last 6 months. In the last trading session the share declined by 2.46
per cent. Cipla share price closed at Rs 580.50 apiece on NSE.
SL
SYMBOL
1D
1W
1M
3M
6M
1Y
PIRAMAL ENTERPRISES
-1.75
3.35
16.57
39.46
102.99
115.83
DIVIS LAB
-0.56
0.71
14.16
17.88
30.28
22.66
CIPLA
-2.46
0.44
11.37
21.84
8.72
-11.2
AUROBINDO PHARMA
-0.6
2.92
7.63
7.97
10.79
12.98
DR REDDYS
0.15
2.25
6.46
4.16
0.28
-19.64
GLENMARK
-0.56
6.93
5.61
16.24
8.79
-10.36
CADILA
-0.6
1.38
22.67
12.98
9.24
LUPIN
-0.79
3.39
1.63
9.19
-13.81
-13.68
SHASUN PHARMA
5.4
28.14
10
GLAXO PHARMA
-0.08
0.91
-2.04
-14.18
-7.12
-10.44
The opportunities in Pharma Sector
The pharmaceuticals industry of the country is expected to account for about 3.13.6 per cent of the global pharma industry by value and currently accounts for 10
per cent by volume, by the year 2016.
Industry revenues are expected to expand at a CAGR of 12.1 per cent during the
period 2012-20 and reach USD 45 Billion.
The healthcare sector of the Country is expected to grow to USD 250 Billion by the
year 2020 from USD 65 Billion currently.
The generics market is expected to grow to USD 26.1 Billion by 2016 from USD
11.3 Billion in 2011.
Disclaimer
The investment advice or guidance provided by way of recommendations, reports or other ways are solely the personal views of
the research team. Users are advised to use the data for the purpose of information and rely on their own judgment while making
investment decision.
Dynamic Equities Pvt. Ltd - SEBI Investment Advisory Reg. No.: INA300002022
Disclosure
Dynamic Equities Pvt. Ltd. is a member of NSE, BSE, MCX SX and a DP with NSDL & CDSL. It is also engaged in Investment
Advisory Services and Portfolio Management Services. Dynamic Commodities Pvt. Ltd., associate company, is a member of MCX &
NCDEX. We declare that our activities were neither suspended nor we have defaulted with any stock exchange authority with
whom we are registered. SEBI, Exchanges and Depositories have conducted the routine inspection and based on their
observations have issued advise letters or levied minor penalty on for certain operational deviations.
Answers to the Best of our knowledge and belief of Dynamic/ its Associates/ Research Analyst: DYNAMIC/its Associates/
Research Analyst/ his Relative:
Do not have any financial interest / any actual/beneficial ownership in the subject company.
Do not have any other material conflict of interest at the time of publication of the research report
Have not received any compensation from the subject company in the past twelve months
Have not managed or co-managed public offering of securities for the subject company.
Have not received any compensation for brokerage services or any products / services or any compensation or other
benefits from the subject company, nor engaged in market making activity for the subject company
Have not served as an officer, director or employee of the subject company
Article Written by
Nabarupa Kanjilal
