Pharma index hits 52-week high; Glenmark, Lupin rally 3% in subdued market

Nifty Pharma index movement today

 

Shares of pharmaceutical companies were in demand, with the Nifty Pharma index hitting a 52-week high at 23,492.55, up 1.6 per cent in intra-day trade on Wednesday in an otherwise subdued market.

 

In the past two trading days, the Nifty Pharma index has rallied 3.3 per cent, as compared to 0.41 per cent decline in the Nifty 50. The pharma index surpassed its previous high of 23,418.20 touched on January 8, 2025. It had hit a record high of 23,907.90 on October 9, 2024.

 

Among individual stocks, Sun Pharmaceutical Industries, Glenmark Pharmaceuticals and Lupin were up 3 per cent each, while, Piramal Pharma, Mankind Pharma, Biocon, Aurobindo Pharma, Ipca Labs, Alkem Laboratories and Granules India were up 2 per cent each in intra-day deals.

 

 

Meanwhile, Torrent Pharmaceuticals, Laurus Labs, Sai Life Sciences and Senores Pharmaceuticals hit their respective all-time highs.  CATCH STOCK MARKET LIVE UPDATES TODAY

Why have pharma stocks outperformed the market?

 

Pharma stocks advanced due to the consistent growth reported by the Indian Pharmaceutical Market (IPM) for December.

 

In the third quarter (October to December) of the financial year 2025-26 (Q3FY26) pharma companies are expected to deliver healthy growth, supported by new product launches (particularly in complex generics segment) and the continued scale-up of existing portfolios. 

 

While pricing pressure in the US generics is likely to persist, companies should continue to outperform the IPM in the domestic market. EBITDA margin may remain uneven, with select players benefiting from a better product mix, while others could see near-term pressure due to higher opex, Choice Institutional Equities said in the Q3 results preview.

 

Additionally, the Biosecure Act - signed by the US President Trump on December 18 - restricts the US federal government entities from procuring or using biotech equipment or services from designated Biotech Companies of Concern (largely Chinese players). This development creates a meaningful opportunity for Indian Contract Development and Manufacturing Organizations (CDMO) players with established global capabilities. Companies such as Divis Laboratories, Piramal Pharma, and Laurus appear well-positioned to benefit from potential supply-chain realignment and incremental outsourcing opportunities, the brokerage firm said.

 

Meanwhile, share price of Laurus hit a new high of ₹1,140.90, gaining 2 per cent in intra-day deals. In the past one month, the stock has rallied 13 per cent, as against a 2.7 per cent rise in the Nifty Pharma and 0.78 per cent gain on the Nifty 50.

 

Analysts at Motilal Oswal Financial Services (MOFSL) expect the CDMO segment to deliver a 30 per cent revenue compound annual growth rate (CAGR) over FY25-28E, reaching around ₹3,000 crore, supported by expansion in production capacities as well as the addition of capacities.

 

The brokerage firm raised its earnings estimates by 11 per cent/10 per cent/6 per cent for FY26/FY27/FY28, factoring in improved anti-retroviral (ARV) prospects, steady pick-up in CDMO projects, and higher generics business backed by CMO opportunities. Analysts expect 50 per cent earnings CAGR over FY25-28.

 

As regards to Sun Pharma, MOFSL in the Q2 results update said that the growth momentum remained intact in global innovative medicines, driven by its increasing reach and enhanced traction in the existing markets. Interestingly, sales of innovative medicines surpassed generics in the US for the first time in Q2FY26. The company remains in good stead in the domestic formulation (DF) market to not only hold a leading position but also to gain market share gradually.

 

The brokerage firm values Sun Pharma at 32x 12M forward earnings to arrive at a target price of ₹1,960.  The company continues to strengthen its branded franchise across focus markets in developed and emerging regions. Product launches and increased penetration should help Sun Pharma sustain superior growth compared to largecap peers in Indian pharma space, analysts said. Shares of Sun Pharma gained 3 per cent to ₹1,806.60 on the NSE in intra-day trade today.   ==================================  Disclaimer: View and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers discretion is advised.