Pharma shares price movement
Shares of pharmaceutical companies continued their upward movement with Lupin and Torrent Pharmaceuticals hitting new highs,and the sector major Sun Pharmaceutical Industries quoting close to its record high. These three stocks gained up to 2 per cent on the BSE in Wednesday’s intra-day deals in an otherwise weak market.
Pharma sector Q1FY27 result preview
Margin, however, is likely to remain mixed in the near term due to pricing pressure and higher investment spending to support new launches and strategic acquisitions. Analysts at the brokerage firm view these headwinds as largely transitory, as companies continue to invest in higher-margin speciality, biosimilar, peptide and complex product portfolios, which should support stronger profitability in the medium term.
Following the initial surge in industry optimism for Semaglutide, demand growth has begun to normalise towards a more sustainable trajectory. At the same time, competition landscape has narrowed down, with only a handful, including Sun Pharma and Dr Reddy’s from the brokerage firm’s coverage, appearing well-positioned to capture a meaningful market share.
While the long-term glucagon-like peptide-1 (GLP-1) opportunity remains compelling, analysts believe near-term performance will increasingly be determined by execution capability, launch scale-up and market penetration rather than the size of the addressable market alone.
Despite near-term headwinds, the brokerage firm maintains a positive outlook on the sector, supported by a robust pipeline of launches, an ongoing shift toward complex generics and sustained growth in Biosimilars and Contract Development and Manufacturing Organization (CDMO) segments, which together underpin long-term earnings visibility.
Meanwhile, domestic pharma businesses would be in focus for Semaglutide ramp-up amidst emerging concerns of a slow off take. GLP-1 supplies to export markets like Canada would be a more interesting watch given the strong expectations especially for Dr Reddy’s and its suppliers, analysts at YES Securities said in the Q1FY27 earnings preview.
The brokerage firm said it continues to expect Sun and Dr Reddy’s to report strong India momentum while Lupin Q1 US might represent a gradual climb down from a strong FY26.
Analysts said their interaction with select companies suggests gross margin may just scrape through in Q1 with some impact of high-priced input purchases potentially seen in Q2FY27. As was the case in Q4, many of the export names would benefit from a persistent forex tailwind across US and Europe/ROW markets.
Diagnostic companies are expected to clock a better volume quarter YoY while CDMO ones like Syngene would continue to see pain amidst anyway muted expectations. YES Securities expects Gland, Ajanta and Vijaya to report a healthy topline quarter while Dr Reddy’s might have a slow start to FY27. ===================================================== Disclaimer: View and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers discretion is advised.
