Strong Quarterly numbers
Sharekhan expects another quarter of strong y-o-y earnings growth (barring few sectors like automobiles) on the normalised base of last year, supported by an improvement in economic activities (core sector growth of 9.9%/11.6% y-o-y in July/ August) as COVID-19 cases see a significant decline and a sharp pick up in vaccinations.
“The only caveat is the cost push pressure (a sharp rise in commodity prices and elevated freight costs) which could impact margins,” the brokerage has said.
Slightly slower growth in pharma
The Growth is expected to be slow due to pressures in the US business on account of a lack of new product approvals and higher competitive pressures.
“The growth in the India business is expected to be strong. Further, a high base in Q2FY21 and increasing cost pressures are expected to slow down the earnings growth to 4.6% yoy for Q2FY22,” the brokerage has said.
“Factors such as improving growth prospects in the US, expected strong growth in the IPM, emerging opportunities in the API space and strong capabilities developed by the Indian companies leading to a shift in preference towards complex generics / biosimilars would drive the growth going ahead,” Sharekhan has added.
Pharmaceutical companies’ growth is expected to moderate in Q2FY2022 after a series of quarters with a double-digit growth.
13 Pharma stocks among Sharekhan’s top stock picks
The brokerage has suggested 13 pharma stocks buys from its latest Q2FY2022 Results Preview.
Among the stocks to buy from the pharma space include names like Aurobindo, Cadila, Lupin, Dr Reddy’s, Sun Pharma, Biocon, Gland Pharma, Laurus Labs, Solara Active Pharma Science, Abbott India, Caplin Point Laboratories and Metropolis Healthcare.
The above stocks are picked from the brokerage report of Sharekhan. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article
Original news source Credit: www.goodreturns.in