Resurfacing of a new Covid variant, B.1.1.529, that was first reported in South Africa on November 24, has whooped the global equity markets in the past 2 days. However, in this course, pharmaceutical stocks are expected to gain again significantly, as investors are worrying that the pandemic can hammer the economy in the upcoming days. During the first two waves of the pandemic, pharma stocks and IT stocks were two major gainers in the equity markets, globally. Although, in Q2FY22 the pharma companies reported moderate revenues and earnings growth on a YoY basis than Q1FY22.
Hence, investors can consider the pharma stocks again, the people will again increase demands for healthcare and hygiene items, medicines, and vaccines now. With increased demands and manufacturing, the pharma stocks are anticipated to boom this quarter. Yesterday, even during a weak trading day, Nifty Pharma gained around 1.40%.
These are 5 pharma stocks that have been recommended by brokerage firm Sharekhan to buy for good returns.
Aurobindo Pharma (ARV)
Maintaining a Buy rating for Aurobindo Pharma (ARV), with a Target Price of Rs. 875, Sharekhan estimates an upside of 33%. However, Sharekhan revised earnings estimates for ARV down by around 5% for both FY22E and FY23E.
Maintaining a Buy rating for Cipla, with a Target Price of Rs. 1,150, Sharekhan estimates an upside of 28%. the company reported a strong Q2FY22 report, and the brokerage firm is expecting healthy results for FY2022E and FY2023E.
Maintaining a Buy rating for Cadila Healthcare, with a Target Price of Rs. 720, Sharekhan estimates an upside of 57%. the company also reported a healthy report for the Q2FY22, and Sharekhan is estimating a similar growth in the upcoming days.
Maintaining a Buy rating for Ipca Laboratories, with a Target Price of Rs. 2,675, Sharekhan estimates an upside of 30%. However, the management is expecting near-term challenges for the company's API business, along with possibilities of a rise in raw material and logistics prices. Sharekhan has downgraded the company's estimates for FY22E to FY24E by 4%-7%.
Maintaining a Buy rating for Lupin, with a Target Price of Rs. 1,210, Sharekhan estimates an upside of 35%. The Q2FY22 results of the company have fallen marginally due to escalating raw material prices. The brokerage firm has revised down the company's estimates by 8-10% for FY22E/FY23E.