Despite fall, muted FY18 outlook will keep pharma stocks under pressure

Company expects a single-digit decline in FY18 revenues, which took Street by surprise

Led by a steep fall in the Sun Pharmaceutical stock, which was down over 10 per cent, the BSE Healthcare Index fell about 2.5 per cent on Monday. With this correction, the index has shed 21.6 per cent since its 52-week high, while Sun Pharma, the largest constituent of the index, has dipped 41 per cent from its one-year high of Rs 854. Monday’s correction is due to a muted revenue outlook from the Sun Pharma management. The company expects a single-digit decline in FY18 revenues, which took the Street by surprise.  

While pharma stocks have fallen quite a bit,