Indian pharma shares under pressure during 2017

The overall performance of Indian pharmaceutical companies on stock markets remained significantly under pressure during the full year 2017 on account of single digit growth in top line as well as bottom line, US Food and Drug Administration actions against major Indian pharma companies in respect of quality, demonetization, GST [tax] implementation and price cuts, according to a report posted on the Indian pharma portal Pharmbiz.com.

The BSE Healthcare (BSE HC) index of 70 companies improved only by 0.5% to 14,799.42 on December 29, 2017 from last day of closing of previous year of 14,727.59 due to lack of investors support. BSE HC touched to its yearly high at 15,161.02 points on March 17, 2017, and then declined continuously and touched to yearly lowest level at 12,513.13 points on August 11, 2017. Similarly, NEFT Pharma index of 10 pharma companies also declined to 9,620.10 points as compared to 10,267 points as at the close of 2016.

Though the BSE HC remained almost unchanged during 2017, BSE Sensex of 30 companies from important segments of economy, improved smartly by 27.9% to 34,056.83 points as at the close of 2017 as against 26,626.46 points as at the end of 2016. BSE Sensex improved steadily during the full year and reached at yearly highest level at 34,137.99 on December 27, 2017 and lowest at 26,447.06 on January 2, 2017. Meanwhile, Cipla and Lupin shares were removed from BSE Sensex during December 2017. Thus, excluding pharma scrip all other major sectoral scrips of economy shown better performance.

The US FDA actions against several Indian pharma majors like Sun Pharmaceuticals, Dr Reddy's Laboratories, Lupin, Cipla, Aurobindo Pharma, Divi's Laboratories, Alkem Laboratories, Wockhardt, Biocon, Strides Shasun, Torrent Pharma, Alembic Pharma, Claris Injectables, Indoco Remedies, Granules India, Natco Pharma, Marksans Pharma, etc, during 2016 and 2017 impacted financial working. The US market is the key market for growth and due to ban on products by US authorities, the revenues and profit of several companies shown dismal financial performance.

The full report can be found at: http://www.pharmabiz.com/NewsDetails.aspx?aid=106415&sid=1