Indian share markets gave up its early gains during the afternoon session and were trading below the dotted line. Losses are largely seen in metal stocks, software stocks, and auto stocks. While, capital goods stocks and bank stocks traded in green.
The BSE Sensex is trading lower by 45 points and the NSE Nifty is trading lower by 20 points. Meanwhile, the BSE Mid Cap index is down by 0.3% & the BSE Small Cap index is up by 0.3%. The rupee is trading at 64.32 to the US$.
Pharma stocks are trading on a mixed note with Biocon Ltd share price and Torrent Pharma share price leading the losses.
Natco Pharma share price was trading up by 1.4% in the noon session after it was reported that the company has received successful Establishment Inspection Report (EIR) from the US Food and Drug Administration (USFDA) for the inspection conducted at its drug formulations facility at Kothur Unit, Telangana, India, during the period Jan 16th – 24th, 2017. This Kothur formulation facility predominantly caters to regulated international markets, including the US.
Expediting Drug Approval Process to be a Positive for Industry
The BSE Healthcare Index is down in two years. This is a mighty fall compared to the benchmark index, which is up 11% during the same period. A downgrade in the earnings estimates has led to a selloff in the pharma space, which has led to a contraction in the price to earnings ratio (PE) of the pharma index.
The PE ratio of the Nifty Pharma Index for a five-year period stands at 46 times. This ratio has contracted to 35 times currently. The headwinds being faced by this sector, have led to such lethal contraction.
In this dull scenario, there appears to be some respite as the USFDA has expedited the drug approval process. Drug approvals for Indian companies have gone up 50% in the period from January to June 2017 compared to the same period last year.
