India's midcap pharma stocks surge on valuations

Written by Reuters | New Delhi | Updated: Apr 2 2014, 23:29pm hrs
Shares in India's midcap pharmaceutical companies surge as investors are attracted by valuations after under performing recently versus larger rivals.

Wockhardt Ltd surges 20 percent to its daily limit, Ranbaxy Laboratories Ltd is up 10.2 percent, Strides Arcolab gains 10.4 percent, while Aurobindo Pharma Ltd 4.9 percent.

Most midcap pharma stock underperformed sectoral benchmark BSE Healthcare index over last 1 year. For graphic:

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.