Steady sales, Covid-treatment portfolio could drive pharma rerating

Better US prospects, India recovery, boosting sector's outlook

The Indian pharma sector is running out of steam despite being among the few to have posted two consecutive quarters of robust sales.
 

Over the last three months, the Nifty Pharma has underperformed the Nifty50 by 14 per cent. The reason, say analysts, is that investors are exploring other opportunities, given the economic recovery and positive news on Covid-19 vaccines. Nevertheless, growth prospects for the sector are firm and the earnings momentum may continue. The recent stock underperformance and earnings upgrades provide a buying opportunity, given the potential for rerating.

Amey Chalke of Haitong Securities says: “Vaccine filings/approvals are on