Connect with us

Company News

Nifty Pharma Lost 25% In The Last 3 Years. These Stocks Are To Blame

The Nifty Pharma index has been the worst performing sector in the last three years, falling 25 percent. The 25-percent fall in the sector was led by Lupin, Sun Pharma, Glenmark Pharma, Cadila Healthcare, Dr Reddy’s Labs, and Aurobindo Pharma, falling in the range of 14-52 percent.

The sector has been under pressure on the back of USFDA observations, pricing pressure, increasing R&D expenses, and fixed-dose combinations (FDC) ban, among others.

“The generic manufacturers suffer from pricing pressure, regulatory challenges, entry of new players, currency fluctuations and lower purchasing power,” said Centrum Broking in a report

The sector has fallen 10 percent in 2019 and 14 percent in the last one year as compared to a 7.5 percent rise in Nifty in 2019 and 8 percent gain in the last one year. However, most analysts are positive about the long-term prospects of the sector.

The brokerage expects the domestic pharma market to grow at 11-12 percent in FY20 backed by new product and line extension launches, volume growth of existing products, strong demand for lifestyle drugs, ageing population, and an increase in healthcare coverage.

Lupin was the top loser in the index, down over 50 percent in the last three years. The stock, which was priced over Rs 1,450 in 2016, has been reduced to around Rs 750 in 2019. To put into perspective, an investment of Rs 1 lakh in the stock in 2016 would have reduced to Rs 49,000 today.

Sun Pharma also tanked 48 percent since 2016. The stock, which was trading over Rs 700 per share in 2016, is currently trading around Rs 350. For Q4, the company’s profit halved to Rs 636 crore. The drug major had posted a net of Rs 1,342.50 crore in the corresponding quarter last year.

Among other draggers, Glenmark Pharma fell 29 percent, Cadila Healthcare declined 24 percent, Dr. Reddy’s Labs lost 14.5 percent, and Aurobindo Pharma slipped 14 percent in the last 3 years. – CNBC TV18

Copyright © 2024 Medical Buyer

error: Content is protected !!