Published on January 12, 2015

For almost all the drug manufacturers the year 2014 was an action-packed and the party in pharma stocks had continued too in 2014, as the BSE Healthcare Index had profited around 45%. However as per the industry experts, the rally was assisted by a strong growth in revenue and profits of drug makers, due to healthy growth in exports, coupled with the depreciation of the rupee and recovery of demand in the domestic market.

Moreover for the first time in the month of July, 2014 the drug price regulator – National Pharma Pricing Authority (NPPA) had imposed boundaries on the selling prices of drugs outside the national list of essential medicines (NLEM) and with this move by the NPPA, a huge price discrepancy amid various brands of the same underlying drug had triggered. However in the month of September, 2014 this move was called off.

Nevertheless as per the industry expert, the year 2014 had also seen the pronouncement of the prime acquisition deal in the history of Indian pharma, as Sun Pharma which a multinational pharmaceutical company of India had announced the amalgamation of Daiichi-owned another multinational pharmaceutical company Ranbaxy Laboratories with itself in an all stock deal worth USD 4 billion, which will make the Sun Pharma company as one of the largest Indian drug maker and will also make it the fifth largest generic drug company of the world. However, stocks of Pharma offer good opportunity in spite of rich valuations.