Weaker currency, patent expiration boost for healthcare firms

On Sept. 15, BSE Healthcare was one of the two index gainers

Stocks of Indian pharma companies seem to be in the pink of health as investor-interest in them rises on the back of a weakening currency, the expiry of generic-drug patents later this year and a slew of US FDA approvals.

Besides, volumes growth in the industry along with rise in prices is expected to boost growth for the sector in the next one-year period, said analysts.

"We believe the benefit from price increase, improvement in monsoon trend over the last few weeks and the low base should help improve industry growth in September and also 2HFY15. We expect domestic growth to recover to 8-10% in FY15 (vs. 6.3% last year) aided by volume increase, low single digit price increase and resolution of one-off issues seen in FY14," said a report on the pharmaceuticals industry authored by analyst Neha Manpuria of J P Morgan.

On Monday, the BSE Healthcare was one of the two index gainers on a day that saw the benchmarks BSE Sensex and NSE Nifty close down 1%.

The BSE healthcare index was up about half-a-percent as optimism about growth in the sector pushed investor-buying. The BSE Sensex ended at 26,816 while the NSE Nifty closed at 8,042.

On the BSE, Wockhardt, Cipla and Sun Pharma were among stocks which witnessed high turnovers. The defensive sector has been the investor favourite for over a year now with the index having gained over 50% in the last one-year period.