Top Stock Picks: 4 Pharma Stocks To Buy As Suggested By Axis Securities Basis Q4Fy22 Results Preview

Axis Securities is of the view that pharma companies under its coverage shall continue to showcase high single digit growth primarily owing to Injectable and Generic segment. There is cost pressure mounting due to the high costs of organic chemicals as well as solvents in the wake of Russia-Ukraine war and also high API/KSM costs from China that has also registered an increase QoQ. So, the EBITDA margins of pharma companies will remain under pressure.

Indian Pharma market:

Pharma market witnessed 3.9% YoY growth as a volume decline has been offset by a price growth of 5.3%. Further among the segments that registered growth have been cardiac, anti-diabetic and CNS. Also, respiratory segment also registered growth. Further India focussed companies may do well as they are gaining market share in the domestic market.

Hospitals:

As per the brokerage, the hospital segment has performed well because of its low base effect amid the Covid outbreak and the shift of consumer preference from unorganised healthcare to organised as there is offered integrated platform in case of the latter. The brokerage is bullish on stocks like KIMS and HCG that have strong balance sheet and also leadership in their respective therapies.

Q4FY22E Performance:

There is held a view that EBITDA of most pharma companies shall trend lower on account of highest raw material costs as also sustained price erosion in the US at ~5%-6% YoY during the quarter. The sales growth trend in India is expected to be high single-digits for most firms in the last quarter.

4 Top pharma stocks to buy as suggested by Axis Securities

Abbott India
HCG
KIMS
Cipla

Disclaimer:

The stock recommendation or the positive plays from the pharma space are as provided by Axis Securities in its Q4Fy22 results preview report. Readers should engage in their own due diligence and not construe the story as an investment advice into these stocks.

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