22 Aug “Pharma Comeback: 5 Stocks to Watch”
“5 Small and Midcap Pharma Stocks on the Verge of a Positive Shift”
The pharmaceutical sector has endured prolonged challenges both in business performance and stock prices. Factors such as USFDA concerns and pricing pressures in US markets have plagued the industry.
However, recent developments signal positive shifts for companies focusing on domestic and US generic markets.
Mixed Signals in Pharma Landscape
The pharmaceutical sector has witnessed a diverse range of news, with a promising turn for what was previously considered unfavorable.
Notably, domestic pharma companies emphasizing backward integration have witnessed margin improvements due to resolved supply chain disruptions.
For prominent pharmaceutical giants reliant on US market pricing trends, a glimmer of hope has emerged. Shortages in the US market have propelled the prices of generic drugs upward.
However, the sustainability of this trend remains uncertain, especially with impending US elections that might trigger governmental interventions to cap prices.
Small-Cap Companies Leveraging Domestic Market
Select small-cap pharma companies that have steadfastly targeted the domestic market are now positioned advantageously. Several of these companies embarked on restructuring strategies, some dating back three to four years. As these plans near fruition, analysts’ optimism for these small-cap pharma entities has grown.
The list features companies with a potential upside of up to 23 percent within the pharma sector. The data has been curated from the latest ET Stock Reports Plus report as of Aug 22nd, 2023.
Criteria for Stock Selection
This report focuses on stocks with an overall rating of either “Strong Buy” or “Buy.”
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Granules India Limited
- Recommendation: Buy
- Analyst Count: 7
- Upside Potential: 23.7%
- Institutional Stake: 23.8%
Overview: Pharmaceutical manufacturing company with a presence in India and abroad.
Product Portfolio:
Active Pharmaceutical Ingredients (APIs)
Pharmaceutical Formulation Intermediaries (PFIs)
Finished Dosages (FDs)
Manufacturing Facilities: 7 facilities (6 in India, 1 in the United States)
Global Markets: USA, Canada, Latin America, Europe, Asia Pacific, India
Subsidiaries: Granules USA Inc, Granules Pharmaceuticals Inc, Granules Europe Limited, Granules Lifesciences Private Limited.
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Indoco Remedies Limited
- Recommendation: Buy
- Analyst Count: 7
- Upside Potential: 17.5%
- Institutional Stake: 18.5%
Overview: Engaged in pharmaceutical product manufacturing, specializing in finished dosage forms and active pharmaceutical ingredients (APIs).
Integrated Approach: Research-oriented and integrated pharma company involved in manufacturing and marketing.
Geographical Presence: Operations within India and outside India.
Marketing Divisions: Nine domestic marketing divisions offering a diverse brand portfolio.
Therapeutic Segments: Offers brands in various therapeutic segments, including
-Gastrointestinal, Respiratory, Anti-Infective, Stomatologicals, Ophthalmic, Nutritionals, Cardiovascular, Anti-Diabetics, Pain Management, and Gyneacology.
Key Brands: Cyclopam, Febrex Plus, Sensodent-K, Karvol Plus, ATM, Oxipod, Cital, Sensoform, Sensodent-KF, Cal-Aid, Cloben-G, Glychek, Kidodent, Carmicide, Rexidin, MCBM, and Methycal.
Supriya Lifescience Ltd
- Recommendation: Strong Buy
- Analyst Count: 2
- Upside Potential: 16.8%
- Institutional Stake: 5.9%
Overview: Engaged in manufacturing active pharmaceutical ingredients (APIs) with a focus on various therapeutic segments.
Therapeutic Focus: Specializes in producing APIs for segments like Antihistamine, Anti-Allergic, Vitamins, Anesthetics, Ant-Malarial, and Anti-Asthmatics.
Expertise: Handles diverse chemical reactions such as Friedel Craft’s Acylation, Claisen Condensation, Grignard Reaction, Mannich Reaction, and more.
Facilities: Equipped with delineated quality check areas, multiple clean rooms, engineering/maintenance, warehouse, and in-house microbiological lab.
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Strides Pharma Science Limited
- Recommendation: Buy
- Analyst Count: 3
- Upside Potential: 16.6%
- Institutional Stake: 27.9%
Overview: Pharmaceutical company focused on IP-led niche and pharmaceutical product development and manufacture.
Segments: Operates through Pharmaceutical and Bio-pharmaceutical segments.
Geographical Presence: Serves regions including Africa, Australia, Asia (excluding India), North America, Europe, India, and Others.
Product Range: Offers diverse dosage forms such as
-Liquids, creams, ointments, soft gels, sachets, tablets, and modified release formats.
Manufacturing Units: Eight manufacturing units in India (Bengaluru, Puducherry, Chennai), Singapore, Italy (Milan), the United States (Florida), and Kenya (Nairobi).
Engagement: Engaged in manufacturing soft gelatin capsules and drugs for segments like anti-retroviral, anti-malarial, anti-tuberculosis, hepatitis, and infectious diseases.
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Suven Pharmaceuticals Limited
- Recommendation: Strong Buy
- Analyst Count: 3
- Upside Potential: 10.8%
- Institutional Stake: 18.0%
Overview: Provides services in global life science and fine chemicals, including custom synthesis, process R&D, scale-up, and contract manufacturing.
Segments: Operates through Pharmaceuticals Manufacturing and Services segment.
Global Presence: Serves markets including India, the United States, Europe, and Rest of the World.
Offerings: Provides bulk drugs, intermediates, fine chemicals, and services in various regions.
Wholly Owned Subsidiary: Suven Pharma Inc.
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