Pharma stocks buck market weakness as Dr Reddy’s gains

Dr Reddy’s Laboratories soared 9.4% – the highest single-day gains since September 2017. Piramal Pharma and Cipla jumped 6.5% and 5.6%, respectively.

The Nifty Pharma Index gained 2.4% while the benchmark Nifty declined 0.8% on Thursday. Out of the 20 stocks in the Nifty Pharma Index, 16 advanced and four declined.

“The target action date for Dr Reddy’s Semaglutide generic filing in Canada is around the corner (May), and positive expectation around a successful approval may have triggered a rally in the stock,” said Vishal Manchanda, Senior VP – Institutional Research, Systematix Group. The company has yet to make any official disclosure.

Two other companies in the Semaglutide value chain – OneSource Specialty Pharma and Shaily Engineering Plastics also surged, said Manchanda. OneSource jumped 10.8% while Shaily Engineering Plastics soared 14.1% on Thursday.

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Pharma shares are gaining popularity because of their defensive positioning, as the broad market outlook remains uncertain. “Fund managers would have rebalanced their portfolios towards a more defensive stance, given that the geopolitical situation remains fragile as reflected in oil prices, a day after the ceasefire between the US and Iran ended,” said Gaurav Sharma, head of research, Globe Capital.