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    Pharma, telecom stocks shine on Covid-hit Street

    Synopsis

    Telecom stocks have also stood out because of shrinking competition in the industry.

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    Rajiv Sharma, head of research at SBICAP Securities, said Bharti shares have rallied as telecom is less affected as a sector by Covid-19.
    Indian stock markets are down over 20 per cent from February 19 but there are some outliers which have defied the weak market trend. About 15 of the top 20 gainers in the BSE 500 index since February 19 — when the sell-off began — are pharma companies. Shares of drug makers have made a comeback after many years of underperformance because of easing regulatory norms in the US and cheaper valuations. Telecom stocks have also stood out because of shrinking competition in the industry. ET takes a look at 8 stocks which have gained since February 19.

    INDIA CEMENTS
    CMP: Rs 117.55

    Change since Feb 19: 57.8 per cent

    Sanjiv Bhasin, director, IIFL Securities, said the stock outperformed due to its cheaper valuation and the creeping acquisition by investor Radhakishan Damani and family. Damani and family have increased stake to 19.87 per cent in India Cements from 4.73 per cent at the end of the December quarter. Bhasin said the stock can rise to Rs 135 by this Diwali.

    SYNGENE INTERNATIONAL

    CMP: Rs 850.35

    Change since Feb 19: 13.81 per cent

    Jefferies said Syngene reported strong performance in the fourth quarter as Covid-19 impact was lower. The brokerage believes that Syngene International remains well placed to gain market share and see strong
    earnings traction over the medium term.

    CIPLA

    CMP: Rs 620.35

    Change since Feb 19: 38.64 per cent

    Analysts believe that Cipla is best positioned in the pharma sector to endure the pandemic. A well diversified portfolio, strong cost rationalisation credentials, limited regulatory risk from US FDA and low leverage are factors because of which Cipla can emerge stronger from the Covid-19 disruption, said Edelweiss, which has a buy rating on Cipla with a target price of Rs 730.

    ALEMBIC PHARMA

    CMP: Rs 870.90

    Change since Feb 19: 29.7 per cent

    Alembic has outpaced many of its peers in terms of stock performance. Analysts at HSBC said Alembic has continued
    to benefit from the ongoing disruptions in the sartans —which is a class of drugs used for lowering high blood pressure. Maintaining a ‘buy’ and target price of Rs 770, the brokerage said it remains positive on the strong
    outlook for US sales.

    VODAFONE IDEA

    CMP: Rs 5.65

    Change since Feb 19: 34.84 per cent

    Tariff hike reflected in Bharti’s March result, and there is an expectation that Vodafone Idea’s will improve, said analysts. If this happens their ability to sustain or survive will improve while market has been building less
    survival possibility given AGR issues, said analysts. Analysts said the stock has also moved higher, mirroring the gains in Bharti Airtel’s shares.

    LUPIN

    CMP: Rs 873.40

    Change since Feb 19: 23.21 per cent

    Analysts said the stock outperformed due to strong visibility on US earnings led by easing of regulatory issues.
    Regulatory resolution would allow Lupin to make a strong comeback in the US where pricing environment has been stabilised and trade war concerns between the US and China could provide an opportunity to Indian generics, said Prabhudas Lilladher.

    DR REDDY’S LAB

    CMP: Rs 3910.75

    Change since Feb 19: 19.34 per cent

    Investors are turning defensive and the company has recently got an EIR from US FDA for its Srikakulam unit. “DRRD has a successful track record on the regulatory front. With the outcome of the CTO VI inspection, the company has resolved all warning letters,” said Nomura in a recent note, retaining a ‘buy’ rating and target price of Rs 4,426.

    BHARTI AIRTEL

    CMP: Rs 594.04

    Change since Feb 19: 9.33 per cent

    Rajiv Sharma, head of research at SBICAP Securities, said Bharti shares have rallied as telecom is less affected as a sector by Covid-19. In fact, it has been one of the beneficiaries as data consumption has picked up, said Sharma. Sharma has an overweight stance on the stock and target price of Rs 690. CLSA has raised target price on Bharti to
    Rs 720 from Rs 670.




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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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