On Jan 6, Indian pharmaceutical stocks rallied sharply, pushing the Nifty Pharma index up nearly 1.7% to 23,126.85.
What sparked the jump?
Brokerages issued positive notes on several major drug makers and the whole sector. Analysts said the rise reflects steady growth in the Indian pharmaceutical market for December and selective buying by investors.
Brokerage outlook on contract drug makers
HDFC Securities started coverage on contract drug makers such as Divi’s Labs, Anthem Biosciences, Sai Life Sciences, Laurus Labs and Piramal Pharma. They expect the sector to benefit from more research‑and‑development outsourcing and lower labor costs, which could reduce reliance on China.
- India’s share of the global contract R&D and manufacturing market could grow to 4.7% by 2029 (up from 3.8% in 2024).
- Revenue growth is projected to accelerate to a 15% compound annual growth rate (CAGR) for FY25‑28, versus 9% for FY23‑25.
- EBITDA growth could rise to 22% CAGR in FY25‑28, compared with 12% in the earlier period.
Top gainers and losers
Several stocks posted strong gains:
- Divi’s Laboratories rose over 4.5% to ₹6,651, with Citi calling it a top pick and expecting revenue to triple by FY30.
- IPCA Laboratories and Lupin each climbed about 4%.
- Aurobindo Pharma, Mankind Pharma, Glenmark Pharma and JB Chemicals & Pharmaceuticals gained more than 2%.
- Torrent Pharmaceuticals, Alkem Laboratories and Sun Pharma were up around 2%.
- Wockhardt, Laurus Labs and Zydus Lifesciences added just over 1%.
Stocks that fell:
- Ajanta Pharma dropped 2.5%.
- Biocon and Gland Pharma each slipped about 1%.
What this means for investors
The rally suggests that investors are optimistic about the sector’s growth prospects, especially for contract drug makers that could see faster revenue and profit growth in the coming years.
Disclaimer
Remember, this is just an overview, not a prediction. Do your own research and consider your risk tolerance before making any investment decisions.