Nifty Pharma index came under attack from bears on Tuesday forcing the sectoral gauge to close 4.33% lower, the worst single-day fall recorded by the index since December last year. The sell-off in pharma stocks was led by heavyweights, with Dr Reedy’s Laboratories falling a massive 10.31% after its quarterly results failed to impress investors. “Weakness in Dr Reddy’s resulted in a massive liquidation in the shares of other pharmaceutical companies, dragging down the Nifty Pharma index by more than 4 per cent during the day, which is the biggest intraday fall since December 2020,” said Shrikant Chouhan, Executive Vice President, Equity Technical Research, Kotak Securities.
Top pharma losers
–Dr Reddy’s Laboratories – down 10.31%, closed at Rs 4,853 per share
–Aurobindo Pharma – down 4.68%, closed at Rs 908.25 apiece
–Lupin – down 4.31%, closed at Rs 1,115 per share
–CIPLA – down 3.51%, closed at Rs 917 apiece
–Divi’s Laboratories – down Rs 2.46%, closed at Rs 4,800 per share
–Sun Pharma – down 2.35%, closed at Rs 686.9 apiece.
The remaining Nifty Pharma constituents, Biocon, Torrent Pharma, Cadila Healthcare, and Alkem Laboratories were also in the red on the closing bell. “Bleeding pharma companies pulled down the market due to a weak start to sector earnings season,” said Vinod Nair, Head of Research at Geojit Financial Services.
Dr Reddy’s was the worst-performing stock among pharma companies. The company reported a net profit of Rs 570.8 crores in the first quarter of the financial year 2021-22 as compared to Rs 579.3 crores, down by 1% from the previous year. “We believe that the weaker set of numbers reported by Dr. Reddy’s Laboratories Ltd are due to sales degrowth in API business and muted sales growth in USA business. India business and Europe business have reported sales growth of 69% and 12% respectively,” said Yash Gupta, Equity Research Associate, Angel Broking.