The Nifty Pharma sub-index scaled a fresh record high on Wednesday, demonstrating resilience in an otherwise weak broader market. Investors shifted towards defensive sectors amidst rising economic uncertainty, favoring pharmaceutical stocks.
Top Performers Drive Sector Growth
Among the top gainers, shares of Zydus Lifesciences Ltd, Mankind Pharma Ltd, and Aurobindo Pharma Ltd climbed between 1 per cent and 6 per cent during the trading session. Other notable pharma stocks, including Wockhardt Ltd, Gland Pharma Ltd, Sun Pharmaceutical Industries Ltd, Cipla Ltd, Laurus Labs Ltd, Lupin Ltd, Divi's Laboratories Ltd, Abbott India Ltd, IPCA Laboratories Ltd, Alkem Laboratories Ltd, and Glenmark Pharmaceuticals Ltd, also traded higher.
Market experts attribute the sector's robust performance to several factors. "Pharma is one sector that has been performing well for quite some time. Over the past one month, we have witnessed strong buying interest in the sector," stated Gaurav Sharma of Globe Capital. He noted that most companies have reported reasonably strong quarterly numbers, with exports benefiting significantly.
Rupee Depreciation Boosts Exports
A key driver for the export-oriented pharmaceutical sector is the depreciating Indian rupee against the US dollar. The rupee slipped to a fresh record low of 96.88 against the dollar, making dollar-linked revenues more appealing and supporting margin expansion for Indian drugmakers.
Kranthi Bathini, Equity Strategist at WealthMills Securities, echoed these sentiments, attributing the ongoing rally to the weakening rupee. "One can buy pharma and healthcare stocks for medium- to longer-term horizon," he advised. Market expert Ajay Bagga also emphasized that the pharma sector remains an evergreen story amidst a falling rupee.
Beyond currency advantages, the sector is also witnessing support from rising global demand for generic weight-loss drugs, further enhancing its growth prospects.
Zydus Lifesciences Posts Strong Q4 Results
Separately, Zydus Lifesciences shares surged following the announcement of its March quarter earnings. The drugmaker reported a consolidated net profit of Rs 1,272.5 crore for the fourth quarter, marking an 8.7 per cent year-on-year (YoY) increase. Revenue from operations also saw a significant rise, climbing 16.2 per cent YoY to Rs 7,587 crore from Rs 6,528 crore in the corresponding period last year. Additionally, Zydus Lifesciences announced a share buyback worth up to Rs 1,100 crore, further boosting investor confidence.