Pharma Stocks on a Roll; Glenmark Pharma, Cadila Healthcare, Lupin, Cipla Gain 4-20%

The Nifty Pharma index jumped nearly 5% in intra-day on Monday even as broader markets slid after investors and analysts seemed to turn bullish on pharmaceutical companies after the recent correction in healthcare stocks. Stocks like Glenmark Pharmaceuticals, Lupin, Cadila Healthcare, Cipla among others spiked 4-20% in intra-day trade.

At 2:25 pm, the Nifty Pharma index was trading at 9,044.85, up 2.8%, after hitting the day’s high of 9,229.60. Interestingly, the Nifty Pharma index has jumped nearly 27% since the week starting 23 March and has recovered all its losses seen this year after the Covid-19 pandemic took its toll on the equity markets.

Among specific stocks, Glenmark Pharmaceuticals Ltd shares were the biggest gainer, advancing as much as 20% to Rs 297 apiece. The stock has risen over 44% in the last five trading sessions itself.

Meanwhile, Cipla Ltd shares jumped as much as 4.4% to Rs 605 apiece after the drug maker said on Thursday that it has received final nod for its asthma medication Albuterol from the US Food and Drug Administration (USFDA). After the announcement, ICICI Securities gave a ‘buy’ rating on Cipla with a revised target price of Rs 668 compared with Rs 542 earlier based on 23 times FY22E earnings. Another brokerage firm Emkay Global also issued a ‘buy’ rating on Cipla with a target price of Rs 522.

Cadila Healthcare Ltd shares also gained nearly 4% to Rs 364.90 apiece after the company announced on Friday that it had received tentative approval from the USFDA to market Empagliflozin tablets used to improve blood sugar control in adults with Type 2 diabetes mellitus. Separately, the company said that it has initiated an accelerated research programme with multiple teams in India and Europe developing a vaccine for the COVID-19 based on two approaches.

Lupin shares were also in favour on Monday, advancing as much as 7.4% to Rs 848.80, as the company received an Establishment Inspection Report (EIR) after closure of the USFDA inspection of its Nagpur facility. The inspection for the facility was carried out between 6 January and 10 January.