Pharma stocks juggle as investor interest rallies

Kailash Rajwadkar & Sudhir Shetty

Mumbai, Nov 27: Pharmaceutical stocks across the board rallied on Tuesday bucking the overall weak trend in the market, market players tagged it with defensive buying after the pharma sector was being sidelined for two weeks under the shadow of high flying software stocks.

A dealer at a domestic brokerage said, “Pharma stocks after rallying smartly in the last couple of months remained sidelined in the last couple of months as market players focussed on software stocks, but profit-booking in software stocks plus apprehensions of the guage of the rally in techs led to investors shifting their sectors,”.

Second line pharmaceutical shares had a smart run on Tuesday along with domestic leaders like Dr Reddy’s Laboratories, Cipla and Ranbaxy, the counters which rallied smartly today were, Wockhardt, Morepen Laboratories and Glenmark Pharmaceuticals (GPL).

The Wockhardt stocks closed Rs 26.85 higher at Rs 406.15 on a volume of 36,524 shares on Tuesday on rumours that the company is likely to announce a buy back of shares. Analysts said, the positive mood in the stock in Wockhardt was also a result of the IND filing on WCK-771 announced by the company last week.

Other pharma scrips like Dr Reddy’s Laboratories, Cipla and Ranbaxy too went by up by 5.6 per cent, 2.1 per cent and 2.0 per cent respectively during the day.

Among other pharma scrips clocking high volumes were, Morepen Laboratories which saw volumes in excess of 17 lakhs on the back of fund a speculative buying, while Cipla, which normally has a volume in excess of 50,000-odd shares, has surprisingly come down to 15,357 shares on Tuesday.

Another low profile pharma scrip — GPL — has witnessed a volume spurt of around 1.15 lakh shares over the last three trading days. At the GPL counter, volumes which have been soaring since the last week of September, saw 47,000 odd shares changing hands on Friday and Monday each. The scrip otherwise had an average volume of around 10-12,000 shares per day before September, analysts said.

In Dr Reddy’s Lab and GPL case, there was also rumours in the market that the domestic pharma major was accumulating shares in GPL or was looking to subscribe for preferential shares offered by GPL.

However when contacted, both the companies denied any such development.