Improved sentiment, hopes of better sales fuel gains in pharma stocks; Divi’s Lab spurts 8%

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April 12, 2023
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Multiple counters in the pharmaceutical space, including Divi’s Laboratories, Cipla, Sun Pharmaceuticals, Lupin, and Natco Pharma also witnessed large deals on April 12.

Shares of pharmaceutical companies inched higher in early trade on April 12, buoyed by an improved sentiment and hopes of better sales on the back of a rise in COVID-19 cases.

“Expectations of improved sales prospects as we see more news around rising COVID cases could potentially be one reason for the uptick seen in pharma stocks today,” said Vishal Manchanda, Vice-President of Institutional Research at Systematix Shares and Stocks (India).

Also read: Cipla shares edge higher on large exchange volumes, hopes of better sales

“Additionally, there is a positive sentiment surrounding the pharma sector in anticipation of a recovery in the US market, which could show signs as early as the fourth quarter results,” Manchanda added.

Most analysts believe that the worst for the pharma industry is over now as trends in the US market reflect signs that price erosion might have peaked. Ajit Mishra, VP – Technical Research, Religare Broking, added that the pharmaceutical pack’s sharp underperformance over the past year had fueled prospects for buying at lower levels, contributing to positive sentiment.

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On top of that, multiple counters in the pharmaceutical space, including Divi’s Laboratories, Cipla, Sun Pharmaceuticals, Lupin, and Natco Pharma also witnessed large deals on April 12.

Gains in the sector were spearheaded by Divi’s Laboratories as the stock witnessed several large deals. At 11.51 am, shares of Divi’s Laboratories were trading at Rs 3,144.70 on the National Stock Exchange, up 7.42 percent from the previous close. Divi’s Laboratories was also the top gainer in the Nifty 50.

Dr Reddy’s Laboratories also rose to its highest level in 52 weeks in early trade today. At 11.59 am, the stock was trading with gains of 1.69 percent at Rs 4,844.05 on the NSE. Other stocks like Lupin, Torrent Pharma, Biocon and Cipla also rose 1-4 percent, which lifted the Nifty Pharma index 1.55 percent higher.