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Fiscal 2014-15 (FY15) has turned out to be a good year for pharmaceutical companies with nearly half of the top 25 pharma stocks becoming multi-baggers during the year.
As many as 12 out of top 25 most valued pharmaceutical firms have seen price appreciation of more than 100% during the fiscal.
The list includes Lupin, Ranbaxy Laboratories, Aurobindo Pharma, Natco Pharma, Torrent Pharmaceuticals, Abbott India, Shipla Medicare, Indoco Remedies, Ajanta Pharma and Strides Arcolab has rallied between 100%-200%. Wockhardt and Suven Life Sciences zoomed 300% each.
Cipla surged 83%, while Sun Pharmaceutical Industries and Pfizer soared by 76% and 73% respectively.
The National Stock Exchange (NSE) CNX Pharma index has rallied 68%, its sharpest gain in past five years. Earlier, in the fiscal 2009-10 (FY10), the index had surged 83%, the NSE data shows. Thus far in current fiscal, the benchmark CNX Nifty gained 27% against 74% rally seen in FY10.
Barclays expects the pharma sector to continue maintaining its premium vs the broader market, driven by a strong earnings trajectory and a healthy earnings visibility.
“The global growth opportunity is still solid with the US likely to remain the driver of growth for the next 3-5 years. The management teams sounded more confident about other emerging markets and their companies’ abilities to penetrate these. Despite the spate of changes in India’s Pharma market (price regime, ban on drugs, curb on advertising and promotional spending, clinical trial stringency), the teams were positive on the long-term potential,” Barclays said in a report dated March 23, 2015.
Arvind Bothra and Amey Chalke, analysts at Motilal Oswal Securities believe premium multiples for the sector are likely to persist, and expect strong earnings visibility and improving cash flows to support valuations.
As many as 12 out of top 25 most valued pharmaceutical firms have seen price appreciation of more than 100% during the fiscal.
The list includes Lupin, Ranbaxy Laboratories, Aurobindo Pharma, Natco Pharma, Torrent Pharmaceuticals, Abbott India, Shipla Medicare, Indoco Remedies, Ajanta Pharma and Strides Arcolab has rallied between 100%-200%. Wockhardt and Suven Life Sciences zoomed 300% each.
Cipla surged 83%, while Sun Pharmaceutical Industries and Pfizer soared by 76% and 73% respectively.
The National Stock Exchange (NSE) CNX Pharma index has rallied 68%, its sharpest gain in past five years. Earlier, in the fiscal 2009-10 (FY10), the index had surged 83%, the NSE data shows. Thus far in current fiscal, the benchmark CNX Nifty gained 27% against 74% rally seen in FY10.
Barclays expects the pharma sector to continue maintaining its premium vs the broader market, driven by a strong earnings trajectory and a healthy earnings visibility.
“The global growth opportunity is still solid with the US likely to remain the driver of growth for the next 3-5 years. The management teams sounded more confident about other emerging markets and their companies’ abilities to penetrate these. Despite the spate of changes in India’s Pharma market (price regime, ban on drugs, curb on advertising and promotional spending, clinical trial stringency), the teams were positive on the long-term potential,” Barclays said in a report dated March 23, 2015.
Arvind Bothra and Amey Chalke, analysts at Motilal Oswal Securities believe premium multiples for the sector are likely to persist, and expect strong earnings visibility and improving cash flows to support valuations.
| Company | Mar 31,2014 | Mar 30,2015 | %chg |
| Wockhardt | 457.70 | 1862.35 | 306.9 |
| Suven Life Science | 71.95 | 289.80 | 302.8 |
| Ajanta Pharma | 398.00 | 1218.70 | 206.2 |
| Strides Arcolab | 387.05 | 1157.00 | 198.9 |
| Natco Pharma | 798.55 | 2086.60 | 161.3 |
| Indoco Remedies | 140.60 | 362.90 | 158.1 |
| Aurobindo Pharma | 511.50 | 1224.80 | 139.5 |
| Shilpa Medicare | 414.05 | 952.90 | 130.1 |
| Abbott India | 1755.25 | 3948.45 | 125.0 |
| Ranbaxy Labs | 364.90 | 806.65 | 121.1 |
| Torrent Pharma | 524.25 | 1146.05 | 118.6 |
| Lupin | 933.15 | 1999.00 | 114.2 |
| Cipla | 382.80 | 702.20 | 83.4 |
| Sun Pharma | 574.75 | 1010.80 | 75.9 |
| Pfizer | 1273.15 | 2205.85 | 73.3 |
| Cadila Healthcare | 1024.95 | 1696.10 | 65.5 |
| Piramal Enterprises | 548.50 | 866.25 | 57.9 |
| Alembic Pharma | 285.05 | 448.85 | 57.5 |
| Wyeth | 888.40 | 1333.85 | 50.1 |
| Glenmark Pharma | 565.20 | 784.00 | 38.7 |
| Dr Reddy's Labs | 2563.90 | 3425.30 | 33.6 |
| Divi's Lab | 1365.90 | 1810.05 | 32.5 |
| Glaxosmit Pharma | 2573.20 | 3285.20 | 27.7 |
| Sanofi India | 3074.70 | 3277.80 | 6.6 |
| Ipca Labs | 844.85 | 649.75 | -23.1 |
| Price on NSE in Rs | |||
| Source: CapitalinePlus | |||
