Mid-cap pharma shares slide as investors book profit after recent upsurge

Even as the broad market sentiment continues to linger in negative territory, investors appear to be shedding their exposure in shares of several mid- and small-cap pharmaceutical companies after the recent run-up in most of the counters. Most of these pharma scrips rallied between 4-17 percent during the month, outperforming the broader BSE Healthcare index, which gained 3 percent during the period. “Most of these mid and small-cap pharma stocks had a decent run on the bourses in recent sessions. In order to avoid panic situation in the event of market turning volatile going ahead, investors are reducing the exposure in order to be on a safer side,” said an analyst with a local brokerage, who wished not be quoted. [caption id=“attachment_2112597” align=“alignleft” width=“380”]  Representational image.[/caption] According to analysts, the sector faces near-term headwinds such as a slower-than-expected pick up in the USFDA approvals and currency volatility in some of the emerging markets. However, ICICI Securities in its last week report said, “We, however, maintain our long-term bullish view on the sector on the back of its structural strength. Strong visibility on the back of a good product basket and a reasonable base business growth continue to attract buying interest in the pharma sector despite premium valuations.” At 12.35 pm, Claris Lifesciences was the biggest loser, tumbling nearly 8 percent to trade at Rs 282.50. The stock shot up 17 percent in the month so far. Apollo Hospitals, which rose 12 percent from a low of Rs 1,170 touched on May 7, eased on profit taking falling 2.10 percent at Rs 1,283.60. Wockhardt Pharma fell 2 percent to Rs 1,398 after surging 15 percent in the last eight sessions. Other laggards such as Divis Lab declined 1.6 percent to Rs 1,817. From a low of Rs 1,713 touched on May 6, the stock gained 8 percent in the next 12 sessions. Last week, the company in its fourth quarter earnings announcement reported 17.84 percent on-year rise in net profit at Rs 231.47 crore while sales rose 9.45 percent to Rs 818.30 crore during the quarter. Glenmark Pharma, which exhibited a range-bound trend in the month so far, eased nearly 1 percent to Rs 878.30, while Biocon slipped 0.5 percent at Rs 445.50 and Aurobindo Pharma was down 0.34 percent at Rs 1,357.40.