The Union Budget for the year 2010-11 presented today had nothing promising for the Indian pharmaceutical segment except few proposals regarding weighted deduction on R&D expenditure and increased the plan allocation for the Ministry of Health and Family Welfare from Rs 19,534 crore to Rs 22,300 crore for the financial year 2010-11. This provisions failed to boost sentiment during the latter part of the day's trading. The BSE Healthcare (BSEHC) index of 21 major companies improved by 75.16 points to 4,912.98 points from its previous day close of 4837.82 points. Several scrips nosedived due to lack of investors support.

The BSE Sensex of 30 companies went up by 175.25 points to 16,429.55 points after the budget. However, it reached at its intra-day highest level at 16,669.25 points.

Multinational pharma companies received major setback after budget announcements and the scrips of AstraZeneca Pharma, Abbott (India), Aventis Pharma, GlaxoSmithKline Pharma and Solvay Pharm declined sharply. AstraZeneca moved down by Rs 24.50 to Rs 852.70 after the post budget from its previous close of Rs 877.20. Abbott shares also moved down by Rs 21.15 and Aventis by Rs 15.30. Even Pfizer and Novartis shares remain unchanged.

However, Divi's Lab share went up by Rs 22.25 to Rs 623.45 and Sun Pharma scrip surged by Rs 18.20 to Rs 1540.90. Ranbaxy, which has turned the corner during the year 2009 and earned strong profits, has received better support and the scrip moved up by Rs 13 to Rs 467.05.

Analysts pointed out that the industry is fighting several odds in international market and volatile foreign exchange rates impacting the working. Further stringent approval norms and stiff competition is playing against the industry. Further, government pricing policy is putting additional burden. The finance minister has not touched these policy when the industry has established its strong presence in international market and earning net foreign exchange for the country. Considering the time span for the final outcome from research activities and risk of uncertainty, the finance ministry should have given more concessions, pharma analyst added.