Shares of pharmaceutical, including healthcare facilities companies, were in demand at the bourses on Monday, with the S&P BSE Healthcare index hitting a new high after the government banned export of antiviral drug, Remdesivir (injection and API both) in order to address increased demand in view of rising Covid-19 cases in the country.
The domestic manufactures of the drug include Cipla, Cadila Healthcare, Dr Reddy's, Sun Pharma, Jubilant, Syngene (API), Divis Laboratories (API) among others.
Cipla and Laurus Labs from the pharmaceuticals and Dr Lal Pathlabs and Metropolis Healthcare from the healthcare facilities sector hit their respective record highs on the BSE in intra-day trade. Besides these stocks, Ipca Laboratories, Torrent Pharmaceuticals, Dr Reddy’s Laboratories, Divis Laboratories and Neuland Laboratories were up more than 2 per cent each.
At 10:34 am, the S&P BSE Healthcare index, the sole sectoral gainer, was up 1.3 per cent, as compared to 2.7 per cent decline in the S&P BSE Sensex. The S&P BSE Healthcare index hit a record high of 23,047 points in intra-day trade today.
Indian pharma, having delivered >40 per cent return in the first phase of covid, went into healthy correction (strong earnings) as the market saw a gradual flight of investment allocation to cyclicals/industrials, driven by the opening up of the economy, and a broad-market rally.
However, analysts at Phillip Capital believe that it is not over for the Indian pharma – and that it is all set for a sectoral value upgrade, led by a robust exports opportunity, supply chain de-risking by global pharma from China, strategic end-to-end integration, or led by Production Linked Incentive (PLI) schemes, enhanced specialty drug efforts, and recovery of global pharma demand post covid. Also, the covid-led opportunities could be a catalyst in the near term.
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