Pharmaceutical stocks surge on price control revamp hopes

Our Markets Bureau

Mumbai, May 16: Pharmaceutical stocks at the domestic bourses were in the limelight on back of market expectation that the Centre may soon be revamping the price control list for drugs.

All leading pharma stocks including some of the MNCs pharma companies’ stocks hit the upper circuit of 8 more per cent and more with a sharp rise in trading volumes.

According to market circles, the Centre has already finalised the list and there is expectation of removal of drugs than inclusion.

This revamped list would soon receive the nod from the central cabinet and would be implemented by June end.

The firms likely to benefit would be Glaxo India and Ranbaxy Laboratories. But Pfizer Ltd, Hoechst Marion Roussel and Novartis India could suffer as their key products come under price control.

Even then, pharma stocks rose sharply virtually across the board soon after the optimism, as the market saw any form of decontrol as a positive move for the industry.

Glaxo rose as much as 12.55 per cent to Rs 391.40, Ranbaxy Laboratories by 6.09 per cent to Rs 500.80, Cipla 4.24 per cent to Rs 1,124, Hoechst 7.5 per cent to Rs 488 and Pfizer locked in the upper circuit of 8 per cent at Rs 516.05.

E-Merck, Burroughs Wellcome were the most active stocks from the side counters which closed with gains of 13 and 12 per cent respectively at Rs 205.45 and Rs 471. Novartis, however, fell as much as 5.4 per cent to Rs 288.

Typically, MNCs pharma companies have had a greater percentage of turnover coming from drugs that are under the price control and stand to benefit more from any decontrol.

Commenting on the possible impact of the move, analysts said the MNC pharma stocks would be valued by market players. Markets have been waiting for this policy to be in place from a very long time.