Stock Market

Covid-19 Impact: Fears of Chinese API shortage hurt pharma players

   Download Android App    Share in      FullScreen   CheckVideos

Mumbai: Covid-19 fears triggered a selloff in pharma stocks on Thursday, with the BSE Healthcare Index mirroring the more than 8 per cent decline in the benchmark Sensex. Glenmark Pharmaceuticals was the biggest loser on the healthcare index, with the Mumbai-based company’s shares plunging almost 23 per cent, followed by Wockhardt, RPG Lifesciences and Aurobindo Pharma. The fall came even as India Ratings said the credit outlook for Indian pharma companies remains positive in the near-term despite the industry’s “heavy reliance” on Chinese active pharmaceutical ingredients and intermediates. Data from the All India Chemists and Druggists Association showed the domestic pharma industry grew 12 per cent in February compared with 7 per cent in the previous month. The healthcare index dropped 8.3 per cent, while the Sensex retreated 8.2 per cent after India imposed curbs on international arrivals by suspending most visas until April 15.

The US banned travel from mainland European countries in an attempt to halt the spread of the coronavirus. For the pharma sector, which is overly dependent on China for ingredients and intermediary products needed to make medicines, a shortage coupled with India’s export restrictions, has been an overhang.

Analysts at India-Ra said if Covid-19 is not contained in the next three months, the extent of supply disruptions might be greater than in 2017, when several small and medium Chinese companies had halted production. “In case the supply disruption continues over the next three-to-nine months, the pressures on credit buffers could intensify and rating transitions would be imminent,” India-Ra wrote in its note on Thursday. “If the disruption spills beyond the next nine-to-12 months, some of the higher rated corporates could face downward pressure.”




Unlimited Portal Access + Monthly Magazine - 12 issues-Publication from Jan 2021

Buy Our Merchandise (Peace Series)

 

Contribute US to Start Broadcasting


It's Voluntary! Take care of your Family, Friends and People around You First and later think about us. Its Fine if you dont wish to contribute and if you wish to contribute then think about the Homeless first and Feed them. We can survive with your wishes too :-). You can Buy our Merchandise too which are of the finest quality.

Debit/Credit/UPI

UPI/Debit/Credit

Paytm

STRIPE

Details
Category: Stock Market


21