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2022 EnVision Boards

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Isaiah Bell
Isaiah Bell

Which Pharma Stock To Buy [WORK]


Brokerage and research firm BNP Paribas continues to be selective with US generics and does not expect the profitability of this business to materially improve for drugmakers. It prefers pharma companies with clear FDA (Food and Drug Administration) status, a commercial specialty portfolio and a pipeline of complex generics.




which pharma stock to buy


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Price erosion in generics would keep growth in check, with new launches remaining critical. India is among the top five suppliers of pharma products in the US market, with pharmaceuticals becoming the largest imported commodity in the US. Value of import of pharma products from India has increased at an 8% CAGR over CY12-21," said the brokerage note on Indian pharma sector.


With the softening of crude oil price and normalisation of supply chain issues, BNP Paribas expects raw material and freight costs to gradually moderate from elevated levels. This, along with the appreciation of USD should help gross and EBITDA margins improve, it highlighted as it continues to prefer India focused businesses over US generics. Sun Pharma remains its top stock pick, followed by JB Chemicals and Pharma (JBCP) in the Indian pharma space.


Key catalysts for the sector are, as per the brokerage, are steady double-digit growth momentum in domestic pharma; resolution of USFDA issues at impacted plants as inspections have started; and normalisation of price erosion in US generics to mid-single digits.


The brokerage company Sharekhan has maintained its positive stance on pharma stocks, despite the fact that Q4FY2022 was a poor quarter for pharmaceutical companies, plagued by higher cost pressures as increased raw material costs and freight costs pulled down profitability.


According to Sharekhan Q4FY2022 was the third consecutive quarter, wherein pharmaceutical companies were impacted by surging cost pressures. China-related issues (including energy crisis) have impacted raw material availability, leading to sustained higher in input prices. This was compounded by container shortages at ports, leading to elevated freight costs. Further with the markets across the globe opening up the marketing & promotions spends were close to normal levels. This coupled with higher raw-material cost and freight costs exerted margin pressures, leading to a 220 bps y-o-y decline in OPM.


Indian pharmaceutical companies are better placed to harness opportunities as they are competitive globally and hold a sizeable market share in most markets. Moreover, other factors such as 1) long-term opportunities in the US with increasing preference for specialty/complex generics (including biosimilars) and injectables, 2) Expected healthy growth in IPM, which is expected to stage close to double-digit growth in FY2023 as well, and 3) Emerging opportunities in the API space would be key growth drivers over the medium to long term; while in the near term, pricing pressures in the US and cost pressures could act as headwinds, though transient in nature. Collectively, this points towards a strong growth potential over the long term for Indian pharma companies, said the brokerage.


Over the past around two years, the Pharma index, has consistently outperformed the benchmark indices reporting a sturdy 50% returns as compared to a 37% returns by the benchmark. Strong outperformance is expected to continue going ahead as well. Albeit over January 2022 till date, Nifty Pharma has underperformed the benchmarks, factoring in transient headwinds, which could drag the performance of companies in the near term. Over the years, Indian pharmaceutical companies have developed strong capabilities and have proven to be a dependable source for global pharma companies. The confluence of other factors including focus on specialty/complex products in addition to emerging opportunities in the API space would be key growth drivers. Collectively, though near-term headwinds are likely to sustain, longterm growth prospects are intact and, based on this, we have a Positive view on the sector," Sharekhan has claimed based on the valuations of the pharma sector.


Sharekhan has highlighted adverse regulatory changes, delay in plant inspections, and currency volatility as the key risks to the financial performance of the companies in the sector which investors should be aware of.


We believe that Stocks that generate returns and are popular among investors are driven not only by fundamentals (strong financial positions and management) but also by macroeconomic factors. These stocks are suitable for both the bottom-up and top-down approaches to investing. To arrive at such solid picks, various parameters (revenues, cash flows, net profits, etc.) must be evaluated.


India is a country that is known for having the lowest doctor density. Doctor density is the number of doctors per thousand people. Having said that, the number is improving at a swift pace supported by the rising number of medical colleges. With the rising penetration of doctors, medical colleges, and hospitals in India, the growth of the pharmaceutical sector could not be neglected.


Changing lifestyle in India due to factors such as rising urbanization, unhealthy dietary habits, environmental degradation, sedentary lifestyle, and many more have resulted in increasing chronic cases. These factors are likely to push the growth of the chronic therapeutic segment. The segment also provides higher profitability for pharmaceutical companies.


Sun Pharmaceutical Industries Limited is a specialty generic pharmaceutical company and is one of the Best Pharma Stocks to Buy in India 2023. The company is engaged in the business of manufacturing, developing, and marketing a range of generic formulations. It produces a portfolio of generic and specialty medicines targeting a spectrum of chronic and acute treatments.


Cipla Limited is an India-based company that is primarily engaged in the business of pharmaceuticals and is one of the Best Pharma Stocks to Buy in India for Long Term. The Company's segments include Pharmaceuticals and New ventures. The pharmaceuticals segment is engaged in developing, manufacturing, selling, and distributing generic or branded generic medicines, as well as Active Pharmaceutical Ingredients (API).


Dr. Reddy's Laboratories Limited is an India-based pharmaceutical company. The Company's segments include Global Generics, Pharmaceutical Services and Active Ingredients (PSA1), Proprietary Products, and Aurigene Discovery Technologies Limited.


Apollo Hospitals Enterprise Limited is an India-based company, which is engaged in providing comprehensive hospital services. The Company provides and sells pharma and wellness products through a network of pharmacies.


The principal activities of the Company include the operation of multidisciplinary private hospitals, clinics, and pharmacies. The Company operates through two segments: Healthcare and Retail Pharmacy.


This was the list of the best pharma Stocks to Buy in India 2023. If you have never invested in the Pharmaceutical Stock Market before then as a new player it might be intimidating for you. Pharmaceutical Stocks, unlike savings accounts, money market funds, and certificates of deposit, have a fluctuating principal value. Keep your eyes open and analyze the market as well as the Best Stocks in the industry and conduct your own research before making any decision.


Biopharmaceutical firm Bristol-Myers Squibb Company (BMY) offers products for hematology, oncology, cardiovascular, immunology, fibrotic, neuroscience, and COVID-19 diseases. As of October 26, the company had 50+ compounds in development and studied 35+ disease areas.


On December 8, BMY announced a quarterly dividend of $0.57 per share on its $0.10 par value common stock, payable to shareholders on February 1, 2023. This represents a 5.6% increase year-over-year and marks the 91st consecutive year of dividend payment.


The stock has gained 39.9% over the past year and 26.4% year-to-date to close its last trading session at $78.83. It has gained 3.8% over the past month. It is trading higher than its 50-day moving average of $75.70 and 200-day moving average of $74.18.


Big pharma player BMY has a long history of paying dividends, which reflects its robust cash-generation ability. Moreover, analysts expect its EPS to grow 4.1% per annum over the next five years. With the stock trading above its moving averages, indicating an uptrend, BMY might be a solid buy now.


The pharmaceutical industry was in the spotlight during the past few years due to the pandemic as companies rushed to develop therapies and vaccines. Moreover, the industry has seen significant growth in various areas in the last decade, aided by research and development.


According to an IQVIA Institute estimate, total spending and global demand for medicines could reach $1.90 trillion over the next five years. Vaccines will boost the pharmaceutical market to $500 billion by 2027.


ABBV has an overall B rating, which equates to a Buy in our POWR Ratings system. It has an A grade for Quality and a B for Stability. ABBV is ranked #12 in the same industry. To see the additional POWR Ratings for ABBV (Value, Sentiment, Momentum, and Growth), click here.


Rashmi is passionate about capital markets, wealth management, and financial regulatory issues, which led her to pursue a career as an investment analyst. With a master's degree in commerce, she aspires to make complex financial matters understandable for individual investors and help them make appropriate investment decisions. More...


MEI Pharma Inc. has struck an all-stock deal to buy clinical-stage biotechnology company Infinity Pharmaceuticals Inc., creating a company with a broad product development pipeline and a combined balance sheet that is expected to fund operations through mid-2025.


Under the terms of an agreement, shareholders of MEI will own about 58% of the merged company and Infinity's shareholders the remaining 42%, while Infinity becomes a wholly owned subsidiary of the pharmaceutical company. 041b061a72


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