Jan 06 2024, 05:54
6 Indian pharma stocks with upside potential of up to 41%:
The year 2024, started with a correction in nifty, but one set of stocks which were able to outperform were pharma stocks. While it might appear to be a sudden up move, if one looks at what has happened in the pharma sector in the last eight years, there is a good chance that right from valuation readjustments to changing business model might play a role bringing the large pharma companies back into limelight. Infact some of these stocks have quietly inched upward in the last few months.
Pharma stocks had been under pressure for a long time. One of the reasons for underperformance has been that by 2015 these stocks came in the overowned category for both the institutional and retail investors portfolio. Partly this under performance was also due to over valuation at which these companies were trading at that point of time. Last but not the least, close to 2015, USFDA inspections became both more in numbers and stricter, many companies which assumed that they can take care of anything, got a rude shock.
After remaining under pressure for a long time in case as long as seven years, some companies did come up in limelight during covid, but then post covid they again have lost their shine. However in the last few quarters, things are once again turning better for a select set of companies. As sectors, a number of companies have gone through restructuring. Companies which had kept their focus on the domestic market are close to completing their rejig. A number of them kicked off restructuring plans long back, in some cases as long as three to four years back.
A few of those plans are close to bearing fruits and some have even successfully got into the international market with Europe as the first entry point. In the case of companies which were focussed on US markets, they have learned to live with lower margins than they had anticipated and a few of them have moved into generics which are more complex and have higher margins. So for them the shortages in the US market have led to prices of generic drugs moving upward. But that surge in price cannot be taken for granted, especially in an election year in the US. But on the whole after a long phase of consolidation, there is a case for some of them to be brought on watch list. If one looks at the analyst estimates, while they are bullish, price
targets are modest.
Indian Pharma stocks - Upside potential
Jan 4, 2024
Company Name
Biocon
Latest Avg Score
4
Reco
Buy
Analyst Count
20
Upside Potential%
41.67
Inst Stake%
16.7
1M Return%
17.3
Market Cap Rs Cr
33,935
Company Name
Lupin
Latest Avg Score
8
Reco
Hold
Analyst Count
37
Upside Potential %
13.05
Inst Stake %
37.3
1M Return%
8.5
Market Cap Rs Cr
64,021
Company Name
Cipla
Latest Avg Score
7
Reco
Buy
Analyst Count
37
Upside Potential%
Inst Stake%
1M Return%
Market Cap Rs Cr
Zydus Lifesciences
11.53
35.7
7.8
104,935
Company Name
Latest Avg Score
10
Reco
Hold
Analyst Count
29
Upside Potential%
11.35
Inst Stake%
14.4
1M Return%
11.1
Market Cap Rs Cr
71,846
Company Name
Aurobindo Pharma
Latest Avg Score
8
Reco
Buy
Analyst Count
26
Upside Potential%
10.88
Inst Stake%
30.5
1M Return%
5.6
Market Cap Rs Cr
63,979
Company Name
Dr Reddy's Labs
Latest Avg Score
9
Reco
Hold
Analyst Count
37
Upside Potential%
10.42
Inst Stake%
1M Return%
67.6
3.2.
98,935
Market Cap Rs Cr
* Calculated from highest price target given by analysts
source:et
Jan 06 2024, 09:08
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