12 of top 25 pharma shares rally over 100% in FY15

The list includes Lupin, Ranbaxy, Aurobindo,Natco Pharma, Torrent Pharma, Strides Arcolab and Wockhardt.

Fiscal 2014-15 (FY15) has turned out to be a good year for pharmaceutical companies with nearly half of the top 25 pharma stocks becoming multi-baggers during the year.

As many as 12 out of top 25 most valued pharmaceutical firms have seen price appreciation of more than 100% during the fiscal.

The list includes Lupin, Ranbaxy Laboratories, Aurobindo Pharma, Natco Pharma, Torrent Pharmaceuticals, Abbott India, Shipla Medicare, Indoco Remedies, Ajanta Pharma and Strides Arcolab has rallied between 100%-200%. Wockhardt and Suven Life Sciences zoomed 300% each.

Cipla surged 83%, while Sun Pharmaceutical Industries and Pfizer soared by 76% and 73% respectively.

The National Stock Exchange (NSE) CNX Pharma index has rallied 68%, its sharpest gain in past five years. Earlier, in the fiscal 2009-10 (FY10), the index had surged 83%, the NSE data shows. Thus far in current fiscal, the benchmark CNX Nifty gained 27% against 74% rally seen in FY10.

Barclays expects the pharma sector to continue maintaining its premium vs the broader market, driven by a strong earnings trajectory and a healthy earnings visibility.

“The global growth opportunity is still solid with the US likely to remain the driver of growth for the next 3-5 years. The management teams sounded more confident about other emerging markets and their companies’ abilities to penetrate these. Despite the spate of changes in India’s Pharma market (price regime, ban on drugs, curb on advertising and promotional spending, clinical trial stringency), the teams were positive on the long-term potential,” Barclays said in a report dated March 23, 2015.

Arvind Bothra and Amey Chalke, analysts at Motilal Oswal Securities believe premium multiples for the sector are likely to persist, and expect strong earnings visibility and improving cash flows to support valuations.

Company	Mar 31,2014	Mar 30,2015	%chg
Wockhardt	457.70	1862.35	306.9
Suven Life Science	71.95	289.80	302.8
Ajanta Pharma	398.00	1218.70	206.2
Strides Arcolab	387.05	1157.00	198.9
Natco Pharma	798.55	2086.60	161.3
Indoco Remedies	140.60	362.90	158.1
Aurobindo Pharma	511.50	1224.80	139.5
Shilpa Medicare	414.05	952.90	130.1
Abbott India	1755.25	3948.45	125.0
Ranbaxy Labs	364.90	806.65	121.1
Torrent Pharma	524.25	1146.05	118.6
Lupin	933.15	1999.00	114.2
Cipla	382.80	702.20	83.4
Sun Pharma	574.75	1010.80	75.9
Pfizer	1273.15	2205.85	73.3
Cadila Healthcare	1024.95	1696.10	65.5
Piramal Enterprises	548.50	866.25	57.9
Alembic Pharma	285.05	448.85	57.5
Wyeth	888.40	1333.85	50.1
Glenmark Pharma	565.20	784.00	38.7
Dr Reddy's Labs	2563.90	3425.30	33.6
Divi's Lab	1365.90	1810.05	32.5
Glaxosmit Pharma	2573.20	3285.20	27.7
Sanofi India	3074.70	3277.80	6.6
Ipca Labs	844.85	649.75	-23.1
Price on NSE in Rs
Source: CapitalinePlus