In early trading on Tuesday, domestic shares followed the global trend and climbed. The S&P BSE Sensex index was up 95.5 points, or 0.17 percent, at 55,651 points. The Nifty50 index, on the other hand, was up 42 points at 16,538.
Broking firm Sharekhan has placed a "buy" call on these below 3 pharma stocks. According to the brokerage firms, the following are some of the reasons for investing in these pharma stocks.
Buy Lupin with target price of Rs 1,400
Lupin is a renowned pharmaceutical company with a presence in nearly every market in the world. Sharekhan is positive on Lupin, recommending a buy rating and a target price of Rs 1400 in a research report.
According to the brokerage, in the short term, price erosion is projected to have an impact on the US business, but 2HFy2022 is expected to see a significant improvement due to the ramp up in Albuterol and Brovana. Launches in FY23 with high potential and limited competition provide the company even more room to grow.
"Lupin's Q1FY22 operating results marginally missed estimates and so we have tweaked our earnings estimates for FY22E/FY23E. Given the robust growth outlook and the long term growth levers intact, and improving return ratios, we retain Buy on Lupin with an unchanged PT of Rs. 1,400.
Lupin's domestic formulations business has a strong growth outlook and is expected to stage growth in the high teens for FY2022 backed by a chronic-heavy presence and growth in the overall business. The US business on the other hand is witnessing price erosion, which is expected to lead to a subdued Q2," the brokerage has said.
Buy Cadila Healthcare with target of Rs 720
Cadila Healthcare is a bullish stock, with Sharekhan recommending a buy rating and a target price of Rs 720 in its research report.
According to Sharekhan, the Indian business grew by 42.8 percent, with the human health business growing by a remarkable 63.6 percent. Cadila expects the DCGI to approve its COVID-19 vaccine ZyCoV-D for emergency use within the next two weeks.
"Strong growth prospects and earnings visibility, a sturdy balance sheet, healthy return ratios and multiple growth triggers are key positives for Cadila. We retain our Buy recommendation on the stock with unchanged PT of Rs. 720.
Cadila is developing a strong portfolio to treat the COVID-19 virus and this includes vaccines as well as drugs. Cadila has already applied with the DCGI seeking an emergency-use approval for its COVID-19 vaccine - ZyCov-D, the brokerage has said in its report.
Buy Aurobindo Pharma with a target of Rs 915
Sharekhan is strong on Aurobindo Pharma, recommending a buy rating and a target price of Rs 915 in a research report.
"At CMP, the stock is trading at a valuation of 12.4x and 10.8x its FY22E and FY23E EPS, which is attractive. A possible de-merger of the injectables business could provide value
unlocking opportunities. Hence we retain our Buy recommendation on the stock with a revised
PT of Rs. 915, the brokerage has said.
According to Sharekhan, multiple challenges have surfaced, particularly for Aurobindo's US business, such as increased price erosion and a build-up of stocks across channels. At least in the short term, these headwinds are projected to put downward pressure on US revenues.
Investing in stocks has the risk of financial loss. As a result, investors must proceed with prudence. Any losses incurred as a result of decisions based on the article are not the responsibility of Greynium Information Technologies, the author, or the brokerage houses. The preceding content is provided for informative purposes only and was taken from Sharekhan's brokerage report. Due to the fact that the Sensex has now crossed 55,500 points, investors should exercise caution. Investors can invest little amounts rather than putting down a large chunk of money.