Nifty Pharma Index Posts 2.5% Gain Amid Strong Growth Prospects

Pharma Sector Sees Strong Growth Prospects

The Nifty Pharma index rose 2.5% on April 23, driven by strong growth prospects in the Indian pharmaceuticals market. According to Nomura, the India pharmaceuticals market continued to grow in double digits at 10.1% year-on-year in March. Most companies under Nomura's coverage grew ahead of expectations during the month, as reported by Reuters.

At 2:35 pm on April 23, the Nifty Pharma index was trading 2.5% higher at 23,027.55, with several key players leading the gains. Dr Reddy's Laboratories, Piramal Pharma, and Cipla were among the top performers, climbing 10%, 6.5%, and 5.5%, respectively. Other notable gainers included Mankind Pharma, Laurus Labs, and Glenmark, which rose 3.1%, 2.7%, and 2.6%, respectively.

Dr Reddy's Laboratories gained traction on April 23 amid buzz surrounding semaglutide, a key ingredient in popular weight-loss drugs Wegovy and Ozempic. News reports suggested that Dr Reddy's is awaiting approval for semaglutide in India, while the company's shares are likely to be impacted by potential Canada approval.

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The depreciation of the Indian rupee against major global currencies over the past 3-4 months is supportive of the Indian pharmaceutical sector's reported INR earnings. According to Elara Securities, this trend is beneficial for companies with a larger share of overseas revenues, which can retain the currency tailwind at the margin level. However, companies with limited international exposure may experience margin pressure from higher input and operating costs.

Elara Securities has identified Zydus Lifesciences and Granules India as top picks from their coverage universe. The brokerage estimates that the depreciation of the Indian rupee will have a beneficial impact of up to 5% on FY27 revenues and up to 15% on EBITDA for these companies.