Nifty had a tough day today after opening flat at 11,942. The day’s high was at the opening level, and this was the first sign that things would not go well. Bearishness in the auto sector was another sign for Nifty’s fall today. Then, the news from Spain caused European markets to panic, and in turn, pulled down Nifty as well. After consolidating between 9.30 am and 11 am, the index fell sharply. The 11,800 support was also broken smoothly. After touching a day low of 11,711, Nifty 50 closed the day at 11,767.75, down 162.60 points, or 1.36%.
Bank Nifty opened the day at 24,577 and kept falling from there. Similar to Nifty, it consolidated till 11 am to fall further and take support at 23,867 at around 2 pm. After this, Bank Nifty regained to close at 24,075, down 402 points, or 1.65%.
Every major sectoral index fell steeply today, Nifty Metal and Nifty Auto were the worst performers while Nifty FMCG closed just a bit in red.
Asian markets are mixed. European markets are trading in red, at the time of writing.
News Picks
As Amazon won an interim relief in the Reliance-Future acquisition deal, shares of Reliance fell today to Rs 2,034.90, down 3.70%. Reliance has said that the deal is completely enforceable under Indian Law. Let’s see how this story pans out.
Shares of SBI Life closed up 1.32% at Rs 781 after the company announced its Q2 result in market hours. Net profit is up 123% YoY to Rs 290 crores. Premium income rose 27% to Rs 12,858 crores.
Kotak Mahindra Bank announced its results during market hours and caused a jump in its stock price. Share prices of the company went up to Rs 1,410.55, up 1.99%.Yesterday there was an apparent fake news that Kotak Mahindra Bank was set to takeover IndusInd Bank, which was denied by Indusind. Shares of IndusInd jumped to Rs 616.90, up 1.44% for the day. Provisions for bad loans have been drastically reduced, compared to last quarter in a time where bad loans are expected to occur.
Profit booking caught up to the metal sector finally after Nifty Metals’ rally last week. Hindalco JSWSteel, JindalStel, and SAIL featured among the top losers for the day. The fall in profits of JSWSteel for Q2 FY21 might have been a strong reason for this fall.
Two wheeler stocks fell sharply after the festive season failed to boost vehicle demand. Dealers say 2-wheeler Dussehra sales weak and that Navaratri sales down 15% YoY. 4-wheeler sales are said to be doing better. Auto stocks crashed for the day and may fall further in the coming sales. Last day, we had predicted such a situation may happen on marketfeed. You can check out the list of top-losers below.
Markets Ahead
With the market closing below 11,800 with a big red candle, things are not looking good for Nifty. The results season is expected to cause such volatility in the market, and as an example you can take the case of steel sector. As we reported last week, dealerships around the country are reporting a glut of extra inventory with manufacturers pushing out more vehicles but retail demand not keeping up. The curfews imposed in Spain have caused European markets to fall and this was expected to bring down Nifty as well. And obviously, the fall of Reliance led to the fall in Nifty.
The weekend did change a lot of things.
Hope you will all tune in to The Stock Market Show tonight. Keep watching this space for more.
Nifty opened at 11,960 with a big gap-up from yesterday’s close. It even opened above levels indicated by SGX Nifty. After making a day-high of 11,974 in the first 15 minutes, Nifty slowly fell ever so slightly. It took support at 11,910, Nifty went back up to close at 11,930.35, up 33.90 points or 0.28%. Yes, Nifty traded today in a range of only 64 points! Unbelievably so Nifty made a weekly profit, going up 0.8% for since last Friday’s close.
Bank Nifty opened the day at 24,676 and went down throughout the day. After making a day-low near 24,360, Bank Nifty closed at 24,478.30, down 0.02%. Considering the gap-up, it was one of the worst performing indexes.
Auto sector went up the most today with most of the top-gainers from the day coming from this segment. The five-day rally of the Nifty Realty index ended today. The index ended 1.1% lower. All other indices ended flat, with Pharma and banks barely in red.
Major Asian markets are in green today. European markets are also in green. Let’s see how and if the weekend will change things.
News Picks
Shares of Maruti gained the most today with prices closing at Rs 7,102 , up 4.26% for the day. Auto sector had a good day today, with 3 out of the top 5 gainers coming from this segment. Automakers are currently taking a big bet, manufacturing several thousands of cars for the festive season even though retail demand is less. Also, check out this article on Maruti’s past, present and future, by marketfeed.
Shares of Tech Mahindra closed at Rs 847, up 1.14% after the company’s US subsidiary said it will acquire 6.03% stake in US-based VitalTech Holdings for $3 million (roughly Rs 22 crores). Shares calmly went up throughout the day even when Nifty IT formed a red candle. The company posted a Q2 net profit of Rs 1,064 crores, up 9.5% YoY after market hours.
Shares of Asia Granito jumped Rs 279.90, up 5.84% today. Towards the later part of the day, the company informed the exchanges that the board has approved a 5:1 stock split.
Shares of Auto Ancillary stocks stand to benefit after the government said in a notification that it plans to boost Auto component manufacturing through Make in India initiative. Among others, Bharat Forge shares jumped 6.44% to Rs 494.
Aditya Birla Fashion and Retail on Friday approved to raise Rs 1,500 crore by way of preferential issue to Flipkart, for 7.8% total equity in the company. This is big news for the company, and rightly so stocks prices jumped up 7.49% to Rs 165. If you did not know, Aditya Birla Fashion manufactures popular clothing brands like Allen Solly, Peter England, Louis Philippe and VanHeusen. The company also operates fashion retail chain Pantaloons across the country. marketfeed is preparing a full-length article on the company and about this deal, do watch out for it!
Shares in Nifty Metal kept up their rally led by Tata Steel whose share prices went up by 3.27% to Rs 423.05. After market hours, JSW Steel posted a net profit of Rs 1,595 crores for Q2, down 37% YoY even though revenue went up 9%.
Shares of Coal India kept going up from yesterday’s bullishness. Energy sector also went up in general. Yesterday, Coal India had put out a statement saying that their net production for this year as of 20 October is slightly higher than for the same period last year.Shares of Coal India went up 1.64% to Rs 117.70. On a similar note, NTPC share prices also went up 1.77% to Rs 86.15.
Shares of JK Tyres went up 10.43% to Rs 73.05. It has gone up more than 20% in the last two days alone. Last day, the company had announced a 35% YoY drop in net profit to Rs 167.7 crores even while revenue from operations increased to Rs 2,274.84 crores
Markets Ahead
Nifty has once again formed a red candle after nearing 12k. The big gap-up courtesy banks was quickly covered after the fall in Bank Nifty. Pharma also fell throughout the day, just like yesterday. With the heavy consolidation from today, we can expect Monday to probably be a very trending market in either direction. Factors that are causing volatility in the Indian markets are the Q2 results season, upcoming US elections and probable US Stimulus Also, the high production of auto sector without considering the low demand in the retail market might become a huge problem for Q3.
Let’s see how and if the weekend will change things.
Hope you will all tune in to The Stock Market Show tonight. Keep watching this space for more.
Nifty made a big green candle in the first five minutes after opening 11,895 but the bearishness took over just after. After touching the day high of 11,939, Nifty fell and took support at 11,850. After oscillating the whole day, Nifty closed in red at 11,896.45, down 41.20 points or 0.35%. It was an easy day for traders today.
Bank Nifty opened the day at 24,470 and tried testing 24,700 and fell soon. Bank Nifty kept jumping between clear levels and gave clear scalping opportunities. After touching the day low near 24,250, Bank Nifty closed at 24,484, down 151 points or 0.61%.
Nifty Media and Nifty Metal performed the best today, while Nifty Pharma and Nifty IT.
General Asian markets and European markets are in red today. This bearishness was reflected in Nifty as well.
News Picks
Bharti Infratel posted a result after market hours with a profit of Rs 733 crore, down 24% YoY. Shares of the company closed at Rs 196.20, up 1.79%. Watch out for a volatile opening tomorrow. Revenue up 2% YoY To Rs 3,695 crore.
Alembic Pharma posted a net profit of Rs 330 crore, up 32% YoY.
Share prices of SBI Cards closed at Rs 829, down 7.41%. This came after the company reported net profit of Rs 206 crores, down 46% YoY. Net Interest Income (NII) is up 5.1%.
Asian Paints reported a net profit of Rs 851.9 crores, up 1.2% for the Q2 FY21. This beat all street estimates. Share prices closed at Rs 2,095.75, down 0.88%. Paint stocks have been rallying for the past few months, will this be a reversal point after profit-booking?
BAJAJ Auto reported a Q2 net profit at Rs 1,138.2 crore, down 19% YoY below all street estimates.
Shares of IOC went up Rs 78.05, up 2.70% after the board said they are considering raising up to Rs 20,000 crore in FY21 via bonds/debentures on Oct 30.
Shares of Aurobindo Pharma closed at Rs 779, down 3.37% after the company’s US subsidiary got a warning from the US FDA.
Net profits of Ambuja Cement jumped 92% YoY to Rs 440 crore, beating street estimates. Cement stocks have been doing good lately. The company announced Rs 17/share interim dividend.
HDFC AMC reported a net profit of Rs 340 crore, down 8% YoY. Revenue was up 9%. Results were announced after market hours.
Markets Ahead
The US Stimulus looks like it won’t be coming. With the presidential debate coming tonight, do keep watch for any swift movements in US markets. This may affect our markets when they open tomorrow as well. The results season are also expected to keep our markets volatile. If you look at the chart of SBI Cards today, you will understand what I am referring to. Stay invested in safe stocks that you can hold with a peace of mind.
Hope you will all tune in to The Stock Market Show tonight. Keep watching this space for more.
When we talk about industries suffering from COVID-19 pandemic, the airline industry and tourism industry hits our minds. We often forget how catastrophic this pandemic has been to the cinema chains. The central government of India announced a lockdown in March. Since then, theatres around the country have been forced to stay shut. According to an estimate, film exhibitors have already lost revenue of around Rs 9,000 crores.
After nearly 7 months of closure, the government of India has given a green light to open the theatres from October 15. This comes during a time when India is reporting more than 60,000 positive cases daily. Even though the central government has given its nod, state governments will take the final decision. Maharashtra, Kerala, Telangana, Tamil Nadu and few other states are yet to allow the cinema halls and multiplexes to reopen.
The cinemas are allowed to open but several guidelines force them to operate within a very limited space. The Ministry of Information and Broadcasting (I&B) released Standard Operating Procedures (SOPs) which the cinema halls and multiplexes are obliged to follow. The most adverse restriction is on the capacity of people to be allowed to enter. All the halls are ordered to run at a capacity of not more than 50%.How will this impact their business? In one of our articles earlier, we explained to you how the Indian airlines realize its profits by getting more passengers on board. Higher the passengers they have in one flight, more profit they can derive due to lower variable cost. You can read the article here.
Similarly, what cinema halls offer is one screen to all the viewers. No matter, if there are 100 attendees or 10 attendees, screen, ACs and projector, will incur the same cost. Thus, the cost will remain on the same level but revenue will fall. It will further decrease the profit which they can realize.
Apart from this, due to the pandemic situation, cinema halls and multiplexes have to ensure that regular sanitizing of auditorium takes place. Every alternate seat will be marked with a tab or floor fluorescent so that no one occupies those seats. Thermal screening at the time of entry and touchless transaction during any time inside the halls will only increase the expenses.
The Fall in Numbers
“Never in our history of 21 long years have cinemas closed down fully. Like any other business, we have gone through ups and downs in terms of revenues but we had never imagined our revenue will read zero.” – Gautam Dutta, CEO of PVR Cinemas.
PVR Cinemas is the largest cinema chain in India. It has 845 screens which offer 182 thousand seats all over the nation. But due to the lockdown, all the cinema halls were shut. This led to zero revenue from its core business, that is income from the sale of movie tickets. Income from Food & Beverages were also a very high margin business for these cinema halls.
People were aware of how PVR’s Q1 FY21 results will look like. But, it hits you only when you really see it. Below is the snapshot of their performance in the quarter hit by COVID-19. EBITDA, EBIT, PBT, PAT and EPS, all the financial metrics were in negatives. As Gautam Dutta said, this was one scenario, they could have never imagined. The only income they were able to derive included interest income, gain on redemption of MF/investments, convenience fee and other non-operating income.
The only good thing to see in their results was the lower expenses. That is understandable, right? Lower electricity and water bills, no rent and lesser payment to maintain common areas helped the company to reduce its expenses by almost 80%.
If you think, only PVR faced these humongous losses then let’s look at INOX. INOX Leisure Limited is one of India’s largest multiplex chains in the country. Here a snapshot of their Q1 FY21 results.
Again, the revenue generated from the sale of movie tickets was zero. This was the impact on all the cinema chains all over the nation from the past 7 months.
Where is the Content?
Cinema halls are allowed to open but what will they show? All the new movies which have released in recent months have been forced to launch on online streaming websites like Hotstar, Netflix and Amazon. The movies which were near to complete their shoot are witnessing delay in film completion. This will further delay their launch dates.
To begin with, cinema chains are planning to bring old classics at cheaper ticket prices. This phase one will be used to attract footfalls by tapping on the emotional quotient of the customers. In remembrance of late actors Rishi Kapoor or Irrfan Khan, people will be invited to watch their older films at a cheaper price.
The management of cinema chains is optimistic that this can trigger the customers to leave their houses and visit halls slowly. They are ready to offer low prices until new content comes on the screens. Once the new movies are launched, prices are expected to go back to pre-covid levels. Big movies of 2020 like Laxmmi Bomb, Sooryavanshi, ’83’ are yet to be launched. Once these movies are ready with a date, people are expected to walk back to the theatres.
Will people come back?
One issue is content, another issue is the desire of customers. Two obstacles in cinema chains’ way to attract customers are 1) Online Streaming Websites 2) Safety concerns.
If the theatre halls are showing old content until new movies are released, why would a person want to leave the comfort of his/her sofa and pay money to watch the same content in the halls? Cinema chains vs digital platforms have always been a topic of debate. But these COVID times have made the latter highly popular.
People have already taken subscriptions of different digital platforms. Going to theatres will only increase their luxury expenses. Indian audiences do like to visit the theatres but digital platforms have given them a lot of benefits. Wide arrays of options of movies/ TV shows to watch is just one of them. Also, they can easily skip a scene and jump ahead or go back and revisit the scene they loved. Theatres don’t offer this facility.
Cinemas survived the era of DVDs. Many speculated that the arrival of DVDs could end the theatre’s existence. But, that didn’t happen. Instead, cinema chains thrived in recent years. What fight these classic cinema halls bring against digital platforms will be seen in the next few months.
Today, people are moving out of their houses only for compulsory purposes. Will they trust the halls and multiplexes to ensure their safety in these vulnerable times? PVR and INOX are targeting to build customer confidence with an ‘Evangelism’ phase. Here, evangelism means to let the people experience its enhanced safety features first-hand. They believe that if they offer security, then the customers who have visited them can go out and talk about all the good measures taken by them.
The Way Forward
The initial 6 weeks will be very challenging for the film exhibitors. The month of November and December might see one or two big movie releases. Before that, it will be interesting to see if the cinema chains can lure back their customers. PVR has already stated that they are opening only 50%-60% of its total screens.They have also kept two teams on standby in every city. In case there is an issue with any of the employees (eg:if anyone gets diagnosed with Covid), the whole team working at that centre will be replaced.
Another issue which the business will face in the third quarter is rent payments. After two-quarters of zero revenue, it is obvious that the companies will have less cash with them. On top of that, they have to pay rent or common area maintenance (CAM) fee after the re-opening.
Multiplex companies are urging the mall owners to grant full rent waiver but that seems unlikely. Running a mall is very costly. A multiplex cinema normally takes more than one-tenth of the total area. If the full rent waiver is granted, malls will find it very difficult to run its fixed cost. Thus, until the business recovers for the cinema chains, a revenue-sharing approach is most suitable for the multiplex. This will help both the parties to bear losses equally rather than one taking the bullet for the other.
Due to the pandemic, small movie theatres in cities would have maybe closed due to lack of funds. It is a sad reality that this will help the big media houses like PVR and Inox get better margins and maybe survive these tough times.
To sum up, the short-term future of cinema chains is looking very bleak. If social distancing norms are not followed, a chance for COVID-19 outbreak will increase. Currently, cinema chains should aim to get used to these protocols. They should hope for better Q3 performance and aim to gather momentum before they step in Q4. Indeed, it is a very difficult time for the sector. It will be interesting to see how they fight this dual battle against COVID-19 and the popularity of the digital platforms.
Nifty opened at 11,514 to hit a high of 11,524 very fast. It faced rejection at those levels and fell strongly to 11,430 in just over an hour. After regaining and stabilising in green, the index fell again and took support at 11,420. Nifty closed the day at 11,472.25, up 5.80 points or 0.051%.
Bank Nifty performed strongly today unlike Nifty 50. It opened at 22,948 with a gap-up and made a day high of 23,063. The index did not go below yesterday’s close and closed strongly at 23,092.15, up 259 points or 1.13%. It was among the top gaining sectoral index today, with sister index Nifty PSU Bank being up 1.34%.
Auto and banking stocks (along with NBFCs) were the stars of the day, with all top gaining members of Nifty coming from these categories. We had talked about the bullishness of these sectors in the morning market feed here.
Asian markets were mixed. European markets are trading in green at the time of Indian market close.
News Picks
AllCargo Logistics opened at ₹130.60, on the 20% upper circuit. It sustained to close at the upper circuit level. The company had earlier informed the stock exchange its promoters plan to delist the equity shares of the company
Bharti Airtel opened at ₹534/share after Chairman Sunil Bharti Mittal hinted at an increase in mobile services prices in the next six months. The levels could not be maintained and the stock closed at ₹528.65 up 0.33%.
Shares of LIC Housing Finance closed at ₹298.95, up 8.08%. The company had reported a 34 per cent jump in its net profit to Rs 817.48 crore for the quarter ending June helped by lower provisioning. A day high of ₹309 was made by the stock.
Shares of Can Fin Homes Ltdclosed at ₹388.90, up 2.64%. Q1 results of the company are expected to be out today. The market is expecting good results like in the case of LIC Housing Finance.
Shares of Atul Auto closed at ₹189.70, up 6.36% for the day. The prices jumped in expectation of an announcement of good Q1 results.
Adani Enterprises closed at ₹299.80/share, up 20.55%. During the day, reports had come out that the company was eyeing a 74% stake in Mumbai International Airport. Shares are trading at an all-time high with higher volumes than the past 20 days.
Shares of Max Financial Servicesclosed at ₹619.50, up 12.75% today. The NBFC had said Axis Bank now wishes to acquire 17% stake of its subsidiary Max Life Insurance Company. Earlier, the deal was to acquire 29% stake in the company. Ratings agency CLSA had increased its target for the company earlier.
Shares of Rallis India are trading at an all-time high as well, with the stock closing at Rallis India at ₹328, up 8.68%.
Markets Ahead
It has been made clear that Nifty is taking it slow this month. While the general markets slow down, individual stocks in and around the index have been giving amazing returns. Indices like Nifty Auto and Bank Nifty have been giving great returns, with Bank Nifty being up 1% for the third straight day. The index has now gained over 1,000 points in just the last three trading sessions. Heavyweights Reliance and HDFC Bank are barely moving. So it is a great time to look for opportunities outside the index.
Midcaps are rallying, and can be looked at for quick opportunities. So, all is good in the market with profits still to be made for everyone. But don’t forget to invest in only fundamentally strong companies for the long-term!
Nifty had a gap-up opening today at 11,248 points. The index fell sharply after open, and consolidated between 11,190 and 11,240 till 3pm. Just after 3pm, Nifty broke the upper bound with the help of banks and went on to close at 11,247.10, up by 68.70 points or 0.61%.
Nifty Bank also had a gap-up opening along with Nifty 50. The index opened at 21,894 and crashed to 21,400 levels during trade. However, the index made a strong comeback to close in green by the end of day. Nifty Bank closed at 21,754 up 0.34%. Nifty PSU Bank closed in red for the day, with State Bank of India being the top loser in Nifty 50.
Sectoral indices Nifty Metal (+2.51%), Nifty Auto (+2.43%) and Nifty Media (+2.61%) were the top performing indices of the day. Nifty Pharma (-0.33%) closed in red for today.
Asian markets are mixed today. European markets are trading flat, just like Nifty.
News Picks
Shares of NTPC closed at ₹95, up 7.47% after the company announced better than expected results for Q1 FY21. The government-run power giant also announced it has begun bulk supply of fly ash to distant cement plants. The stock also advanced as the company reported better-than-expected results for the June quarter.
M&M share prices closed at ₹623.50, up 1.47% for the day. Introduction of the new Mahindra Thar had received a lot of interest, and is expected to be a smash hit. Nifty Auto was among the top performers of the day. Can interesting cars like this revive India’s struggling passenger vehicle sales?
Glenmark Pharmaceuticals opened at ₹495 and shot upto ₹509 before profits were booked. The pharma company had posted an over two-fold increase in consolidated net profit on Friday. Share prices closed at ₹482.75 for the day, up 1.48%. The share would’ve given easy profits to both sides today. Hope you capitalised on the volatility!
BPCL share prices closed at ₹407.95, down 1.28% after the company announced it has scaled down capex plans for FY21 to ₹8,000 crore from ₹12,500 crore originally planned as projects are stuck due to unavailability of skilled manpower.
Shares of Wipro Ltd. closed at ₹283.50, up 2.53% after the announcement that acquisition of Brazilian IT firm IVA Servicios de informatica Ltda was completed.
Markets Ahead
Today, Nifty showed signs of recovery by the end of the day. The bullishness of Auto and Metal sector stocks are a really good sign for Nifty. The index moved up today while heavyweights Reliance and HDFC Bank closed in red.
Nifty Bank taking a strong and going up is also a good sign for the market. In the end, financial institutions are the backbone of any modern society. So, we can’t help but be bullish on the banking and finance sector, as we all remain bullish on India as a nation. There is no choice for Bank Nifty to go but up in the long run, so investors need not worry. Traders can enjoy the volatility, and book easy profits in these stocks by analysing trends. Wishing you all a wonderful week ahead!
The Pharma sector has boomed. It is not difficult to guess why. It’s because of the ripples of the COVID-19 pandemic. The NIFTY Pharma happened to move sideways around the new year until March 2020, when the stock price fell for a short period. The NIFTY Pharma Index captures the performance of the pharma sector. This was because of the global economic slowdown. Moreover, indecisiveness on part of leaders to declare a lockdown in their country made the incident even more uncertain for the Pharma sector.
Nevertheless, the pharmaceutical market managed to meet the sudden peak in the demand for PPE Kits, Drugs, Safety Kits, Masks, Sanitizers and the paramount need to find a cure or a vaccine for it.
Investors, promoters, philanthropists, institutions and governments infused huge amount of funds into these Pharmas for R&D and mass production of safety kits.
The NIFTY Pharma stocks performed as given below:
Captured on TradingView.
The chart shows the percentage return between the start of lock-down in India i.e. 23-03-2020 and 21-07-2020(DD-MM-YYYY). It shows NIFTY Pharma performance in the topmost frame and the top four pharma stocks(by market cap) in the frame below it. On the right is the percentage return in various colour schemes.
It was such that when the entire market fell Pharma came to rise. The following is the price action for 6 months comparing NIFTY and NIFTY PHARMA. As the confirmation for a COVID vaccine is nears you can expect a highly bullish sentiment on Pharma.
Following are the top 5 performers by
Stock
%Change in last 3 months
Net Profit Qtr Growth YoY %
Net Profit QoQ Growth %
Aurobindo Pharma Ltd.
24.18%
48.24%
23%
Biocon Ltd.
19.41%
-34.21%
-28.27%
Cipla Ltd.
11.86%
-35.14%
-31.47%
Cadila Healthcare Ltd.
6.00%
-13.71%
13.47%
Lupin Ltd.
4.82%
32.35%
146.39%
Source:Trendlyne TABLE 1
You can obtain more fundamental data regarding the stocks given above by clicking here
What can be deduced from the above table(TABLE 1)?
Lupin recorded the highest Net Profit Qtr Growth QoQ
Whereas, Aurobindo pharma recorded the highest % change in price in the last 3 months. Additionally, it also recorded the highest Net Profit Qtr Growth YoY %
It can be seen that the pharma as a sector overall hasn’t performed well on a YoY basis in terms of profit generation and revenue generation. This could be temporary, yet a very long-lived bubble which was inflated due to uncertainty and volatility in the market surrounded by COVID.
CIPLA rallied when it was announced that it was going to launch its own version of the COVID drug Remdesivir along with its competitor Mylan(Not listed in India).
What are the challenges faced by Pharma?
According to Charu Sehgal, Partner and Leader, Lifesciences and Healthcare, Deloitte India, in an interview with Economic Times, the the industry faces the following issue
Manufacturing units/warehouses not working at full utilisation, due to unavailability of staff.
Non-Availability or disrupted supply of raw materials and packing materials.
Absence of seamless internet data connectivity with staff is creating issues in day to day work.
The marketing staff of pharma companies are having problems generating sales due to lack of logistics and communication channels since they are not able to conduct meetings in-person.
The companies that have operations across the globe are facing issues concerning their operations and staff in those locations. Every country has devised its policies and guidelines.
As with all industries, implementing effective and robust cybersecurity measures is a challenge in the work from home scenario.
What do I take from here?
It is evident that the only entity keeping the pharma market afloat is the COVID-19 Pandemic.
India’s active pharmaceutical ingredient (API) industry is expected to generate $6 billion in revenues by the end of 2020.
India has been meeting more than 20 per cent of the world and almost 50 per cent of the US’s generic drug requirements.
India relies heavily on China for Pharma raw materials, this is about to change after political tensions have given rise to “Aatmanirbhar Bharat” and “Make In India”.
The only major shortfall for the Indian Pharma Market is SCM or Supply Chain Management. Watch out for transport and logistics stocks.
China has been losing credibility and momentum in the global market due to its lack of transparency about the COVID situation in the country.
The Physicians and other doctors were closed so far.The number of surgeries and demand for surgical instruments had reduced. As these avenues open up and the need for other drugs and instrument rises the dependency of Pharma market on COVID shall decrease.
According to Research and Advisory firm Firm Nirmal Bang: In the US, there is a sharp drop in patients visiting physicians, especially in the ophthalmology and dermatology categories, which should have an adverse impact on Sun Pharma and Glenmark
There was also a substantial decline in hospitalization (non-COVID patients), which should affect injectable sales of Aurobindo Pharma and Dr Reddy’s.
Finally, The demand has slumped since clinics all around the country remain slumped, yet the Pharma Benchmark continues to rise. Once a conclusive vaccine is found and till the time it doesn’t saturate the market you can expect quite some price action.
