Pharma sector M-cap up 97

Pharma stocks have been on a steep rise during the last one year. This can be seen through a study of market capitalisation of 104 pharma st...

Pharma stocks have been on a steep rise during the last one year. This can be seen through a study of market capitalisation of 104 pharma stocks during the two time periods i.e. May 7, 2004 and May 7, 2003. The aggregate market capitalisation of the 104 pharma companies increased by Rs 39,112 crore 96.9 pc during the study period, from Rs 40,356 crore as on May 7, 2003 to Rs 79,468 crore as on May 7, 2004. But that catch-all statistic conceals the wide discrepancies between the performance of various pharma companies.

Consider Ranbaxy, numero uno in terms of market capitalisation. Though it maintained its number one rank, it gained its value by Rs 6,705 crore. On the other hand, Cipla ascended from third spot to second spot, while gaining Rs 4,127 crore to its market capitalisation. This can be explained from its fourth quarter profit performance. The net profit of Cipla increased by 117.7 pc to Rs 101.7 crore during Jan-Mar 2004, from the level of Rs 46.7 crore during Jan-Mar 2003. The sales of the company also increased by 54.4 pc during the same period.

Lupin beat Wockhardt for the number 6 spot, although the company8217;s value, as measured by the stock market, increased by 2,757 crore over the study period. Some spectacular growth was also seen in pharma stocks during the study period.

Nicholas Piramal added a whopping Rs 2,387 crore to its market capital, an increase of 257.4 per cent over its May 7, 2003 level of Rs 927 crore. Cadila Healthcare notched up growth in M-cap of 332.3 pc. Divi8217;s Lab, growing on a larger base, added Rs 1,590 crore to its market capital during the study period.

It would be a mistake, however, to ascribe all the bullishness during the study period. Some of the biggest falls in M-cap were registered by Advik Lab -53.5 pc, Arvind Remedies -41.2 pc, Morepen Lab -39.0 pc and Gufic BioSciences -6.1 pc. The M-cap of Morepen Lab decreased from Rs 170 crore on May 7, 2003 to Rs 104 crore on May 7, 2004.

In all, 104 pharma firms8217; shares were considered. The share prices have been computed from the official price lists of The Stock Exchange, Mumbai. Closing quotations have been considered for the study.

The top ten in terms of market capitalisation in descending order in May 7, 2003 were Ranbaxy Lab Rs 12,377 crore, Dr Reddys Lab Rs 6,702 crore, Cipla Rs 3,849 crore, Sun Pharma Rs 2,659 crore, Glaxosmithkline Pharma Rs 2,468 crore, Wockhardt Rs 1,220 crore, Pfizer Rs 971 crore, Nicholas Piramal Rs 927 crore, Cadila Healthcare Rs 749 crore and Novartis India Rs 690 crore.

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On the other hand, the top 10 in market capitalisation in descending order in May 7, 2004 are Ranbaxy Lab Rs 19,082 crore, Cipla Rs 7976 crore, Dr Reddys Lab Rs 6,970 crore, Sun Pharma Rs 6,884 crore, Glaxosmithkline Pharma Rs 5,196 crore, Lupin Rs 3,413 crore, Nicholas Piramal Rs 3,314 crore, Cadila HealthcareRs 3,239 crore, Divi8217;s Lab Rs 1957 crore and Aurobindo Pharma Rs 1,918 crore.

Only three companies, namely Lupin, Divi8217;s Lab and Aurobindo Pharma entered the top 10 league on May 7, 2004. Of the top ten companies on May 7, 2004, the highest increase in market capitalisation was recorded in the case of Divi8217;s Lab 433.7 pc followed by Lupin 420.2 pc.