Pharmas shocked over downgrading

DALAL STREET SPIKES

The three biggest losers in the Sensex basket told the story for the pharma sector on Thursday. Dr Reddy's Labs fell 4.52 per cent to close at Rs 754.95, followed by Ranbaxy, down 3.29 per cent to Rs 965 and Cipla fell 2.64 per cent to Rs 210.45.

In fact, the BSE Healthcare index was the biggest loser, falling 2.49 per cent to close at 2,159.29 points despite the broader market closing in positive territory. Brokers said that most pharma stocks lost ground after a foreign brokerage house downgraded some pharma companies.

Analysts said that pharma companies focussing on the US generics market lost ground mainly after the downgrading, which cited increasing competition and margins pressure in the generics business as the reason for downgrading.

Indian pharma companies have been increasingly focussing on the US generic market as a number of drugs are going off-patent in the US in the coming years.