Pharma Stocks Outlook for the week (04-08.06.2012)

Pharma Stocks Outlook for the week (04-08.06.2012)

Pharmaceutical stocks are expected to outperform the broad market next week. Investors are expected to continue offloading their stakes next week as the broad market currently lacks direction amid global uncertainties and domestic worries. Pharmaceutical stocks, being defensive in nature, will tend to move against the broad market trend.

The market is going to see some more lows following India's dismal gross domestic product growth. India's Jan-Mar gross domestic product grew only 5.3% compared to 9.2% a year ago and 6.1% in the previous quarter. Low growth in farm, construction, and manufacturing sectors contributed to the weak GDP growth. We expect certain pharmaceutical counters might be news-driven next week.

Sun Pharmaceutical Industries, whose management's 18-20% sales guidance for the next two years was much above the Street's expectation of 10-15%, is likely to see some upside next week. The company is also likely to announce a few acquisitions outside the US market. Ranbaxy Laboratories is also likely to rise next week expect the company to launch its acne-treating drug as soon as it gets approval from US Food and Drug Administration.