Midcap pharma stocks surge on valuations

Reuters Market Eye - Shares in midcap pharmaceutical companies surged on Wednesday as investors are attracted by valuations after under performing recently versus larger rivals.

Wockhardt Ltd surged nearly 20 percent, Ranbaxy Laboratories Ltd was up about 9 percent, Strides Arcolab gained 9.9 percent, while Aurobindo Pharma Ltd rose 4.6 percent.

Most midcap pharma stock underperformed sectoral benchmark BSE healthcare index over last 1 year.

For graphic: http://link.reuters.com/nun28v

At the same time valuations are lower. Wockhardt is trading at 11.7 times 12-month forward earnings, Ranbaxy at 15.9 times while Strides at 13.7 compared with around 20 for Sun Pharmaceutical Industries and Lupin Ltd , according to Thomson Reuters StarMine.

 

(Reporting by Abhishek Vishnoi)