Domestic pharmaceutical providers have exhibited earnings visibility, least stressed balance sheets, healthier cost-free money flows and capacity to provide solutions in the course of a pandemic, mentioned brokerage and investigation firm ICICI Direct. In the prior one-year, Nifty Pharma index has jumped 56% when the benchmark Nifty 50 index has managed to acquire 24%, clearly hinting at the superiority of pharmaceutical stocks. “The Nifty pharma index has regained momentum after past three weeks healthy breather, signifying resumption of the primary up trend,” the brokerage firm mentioned.
Based on technical evaluation, ICICI Direct has carved out a list of stocks that tends to make a multi-cap pharma stock portfolio. Here, 44.2% of the stocks are huge caps, 44.4% are midcaps when only 11.4% allocated to smallcap pharma stocks. “We have selected a blend of quality companies backed by decent promoter pedigree, respectable fundamentals that are either witnessing a) robust price structure or b) which have undergone significant price/time correction and currently poised with favourable risk/reward setup,” the brokerage mentioned.
In the portfolio, Divi’s Laboratories has the highest weightage of 18% with just a single stock. In the final 6 months, the stock is up 32%. This is followed by Ajanta Pharma with a 17.8% weightage with two stocks in the portfolio at the initiation. Syngene International, the subsidiary of Biocon, also finds a 14.1% weightage. The share value of Syngene is up 23% in the prior six months.
Aurobindo Pharma has been provided a 13.6% weight in the portfolio by ICICI Direct. Aurobindo Pharma is up only 7% in the final six months but due to the fact November has observed an uptick. Further, Cipla and Sun Pharma have been provided a weightage of 12.5% every. Both the shares up gained in the variety of 17-20% in the final six months. Sequent Scientific Limited is the stock with the least weightage on the portfolio with 11.4% assigned to it. In the six-month time frame, the stock is up 84%.
The portfolio is a medium-term, High-threat portfolio benchmarked with Nifty 500 index. According to ICICI Direct, the portfolio can be initiated at Rs 20,300-20,700 with possible returns of 8-15%.
(The stock suggestions in this story are by the respective investigation and brokerage firms. TheSpuzz Online does not bear any duty for their investment suggestions. Please seek advice from your investment advisor ahead of investing.)