Scrips of multinational pharma companies are hovering around their 52-week lows. This is largely because of their poor quarterly results vis-a-vis their Indian counterparts.
SmithKline Pharma, which registered a 71 per cent drop in Q2 bottomline, closed at Rs 133 on the Bombay Stock Exchange today - little off its 52-week low of Rs 126.50.
Burroughs-Wellcome, down Rs 3.30 to Rs 154 on the BSE today, also veered around its 52-week low of Rs 150. It recorded a 32 per cent drop in its second quarter with net profit.
Rhone Poulenc, which saw an 18.17 per cent rise in Q1 net, is also hovering around its 52 week low of Rs 373.95 - the scrip closed down Rs 2.05 at Rs 373.95 on the BSE today.
Even those companies which put up a good showing in the just completed quarter have seen a drop in share prices.
Despite registering a 58.44 per cent rise in Q1 net, Hoechst is moving around Rs 381 levels, up around Rs 20 from its 52-week low of Rs 362.30. Pfizer, which reported a 35.80 per cent rise in Q2 net, traded at Rs 434.95 today. Its 52-week low is Rs 410.
Shrikant Shetty of Wow-India said, since MNCs target the domestic market -- which has a low growth rate of around 6-7 per cent -- they are lagging behind their Indian counterparts, who are aggressive exporters.
The focus on foreign markets, coupled with the introduction of a number of new products in the Indian markets (patent laws prevent MNCs from doing this) have helped the Indian majors outperform their MNC counterparts.
Shailesh Kumar, a BSE broker, said a rise in raw material costs with no corresponding increase in selling prices has seen a sharp decline in margins for MNC pharma majors. Pharma funds have also shifted the focus from MNCs to domestic companies.
