Market capitalisation of top pharmaceutical shares are registering unprecedented rise in recent months in country's stock exchanges. Pharmabiz has observed that the market capitalization of 15 major pharmaceutical companies went up by 33.1 per cent to 1,26,040 crore on May 3, 2006 from Rs 94,692 crore on December 30, 2005.
The pharma shares were in limelight during the past few sessions mainly on account of strong financial performance, bonus issues and dividend announcements. Bullish sentiment facilitated by healthy product pipeline, significant growth in raising money from FCCBs for mergers & acquisitions, heavy investment in R&D, fresh approvals from regulatory authorities and aggressive marketing efforts are all responsible for this upsurge. Support from FIIs, Mutual Funds and retail investors contributed to the trend.
The BSE Health Care (BSEHC) index of 27 drug companies recorded smart gain and closed at 4051.48 on May 3, 2006 as compared to 3114.85 on last trading day of 2005. BSEHC index moved up continuously, with small ups and down, and reached at its all time peak level at 4119.57 on April 7 2006.The index gained over 30 per cent during last four months.
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The BSE Sensex of 30 companies also touched 12,310 on May 3. The Sensex experienced several volatile movements during past few trading session with weather forecast, FIIs support, international oil prices and SEBIs action regarding demat account problem. However, overall sentiment was strong and upward march continued across the board with significant rise in market capitalization. Better economic indicators with rising foreign exchange reserves, higher industrial output, enhance investment in core sectors and capital flow boost the sentiment.
The Pharma analysts have expressed positive note regarding the future course of the segment based on the latest results from major players like Cipla, Orchid, Zydus Cadila, Alembic, Elder, GSK, Aventis, Merck, Sterling Biotech, Jubilant Organosys and other companies. However, companies like Ranbaxy, Wockhardt, Glenmark, Stride Acrolab and Biocon suffered setback. Nicholas Piramal managed to maintain its bottomline.
Cipla scrip gained substantial boost with announcement of bonus issue and healthy bottomline. It remained on top with market capitalization of Rs 20,706 crore on May 3, 2006 as compared to Rs 13,295 crore as at the end of December 2005, a smart gain of 55.7 per cent. After the post bonus issue the Cipla is quoted at Rs 266 on BSE.
Ranbaxy scrip touched Rs 514 with M-cap of Rs 19,165 crore and marked a growth of 42 per cent if compared with market capitalization of Rs 13,495 crore at the end of December 2005. The regular approvals from regulatory authorities gave the necessary support for the scrip movements. This was followed by Sun Pharma with a market capitalization of Rs 16,768 crore, Dr Reddy's Lab Rs 12,652 crore and GSK Rs 11,946 crore on the May 3, 2006.