A USFDA clearence to the Bengaluru unit, litigation outcome of the Aflibercept, a reinspection of the Malaysia unit and financial deleveraging along with a recovery in Syngene and the generics business are some of the key triggers for Biocon going forward, according to Nuvama.
The brokerage has a “hold” rating on Biocon with a price target of ₹310.
On the flip side, Nuvama has raised its EPS estimates for Lupin, Natco Pharma, Sun Pharma and Dr. Reddy’s Laboratories by single digits. However, it sees some near-term challenges for Sun Pharma and Cipla going forward.
For India’s largest drugmaker Sun Pharma, Nuvama believes that a delay in commissioning of some of its studies, higher R&D spending in the second half of the year and a negative outcome of the Leqselvi litigation are some of the key negatives for the stock.
Going forward, a re-inspection of the key facilities by the USFDA, completion of clinical studies and data release and launches of new generics in the US are some of the key triggers for Sun Pharma going forward.
For Cipla, Nuvama wrote that an incomplete recovery in trade generics, potential competition for the Albuterol inhaler in the second half of the financial year and a temporary supply challenge for Lanreotide in the December quarter are some of the key negatives for the Mumbai-based drugmaker.
Commercialisation of the China facility, recovery in the trade generics business, launches of peptide, gSymbicort, gQvar in the coming years are some of the key triggers for Cipla going forward.
Nuvama wrote in its note that the valuation premium of the Pharma index is holding up despite a decline of nearly 8% since October and a cut to its financial year 2025 and 2026 EPS estimates by low single digits.