Fundamental Analysis Report – Nifty Pharma Index – 18 August 2025

Index Overview

The Nifty Pharma Index tracks leading Indian pharmaceutical companies spanning formulations, APIs, CRAMS/CDMO, hospitals/diagnostics adjacencies, and domestic vs. export (US/EU/EM) mix. Key drivers include USFDA compliance, ANDA approvals/launches, domestic price controls (NPPA/DPCO), currency moves (USD/INR), raw-material costs (China dependence), and government policies (PLI, healthcare spending).

Institutional Holdings & Fund Activity

FIIs: Selective inflows into companies with clean compliance track record and robust US pipeline; preference for large-caps.
DIIs: Continued allocations via sector/thematic funds; SIP-driven support to quality names.
Impact: Liquidity supportive; positioning sensitive to USFDA outcomes and margin guidance.

Valuation Check

Tone: Neutral-to-Positive; leaders trade at premium for compliance quality and export optionality; mid-caps at wider dispersion.
Drivers: US pricing environment, new product launches, facility clearances (EIR), and input-cost normalization.

Financial Health Snapshot (Sector Averages)

Leverage: Generally low-to-moderate; select capex-led names higher.
Margins: EBITDA margins improving with mix shift and cost control; sensitive to US price erosion and RM costs.
Cash Flow: Strong OCF conversion for leaders; disciplined capex on CDMO and injectables.
Risks: Compliance lapses (FDA 483/Warning Letters), currency swings, price controls, and channel inventory corrections.

Top & Bottom Performers in Nifty Pharma Index (Illustrative Financials)

Note: Figures below are structured placeholders; replace with the latest reported numbers before publication.

Company	Revenue (₹ Cr)	Net Profit (₹ Cr)	Gross EBITDA (₹ Cr)	Net EBITDA (₹ Cr)	Operating Expenses (₹ Cr)	Performance Rank
Sun Pharma	48,000	8,200	12,500	12,000	35,800	Top Performer 1
Dr. Reddy’s	28,500	5,000	7,800	7,500	20,700	Top Performer 2
Cipla	26,000	4,200	6,800	6,500	19,200	Top Performer 3
Lupin	22,000	3,300	5,800	5,500	16,200	Top Performer 4
Aurobindo Pharma	25,000	3,600	6,200	5,900	18,400	Top Performer 5
Zydus Lifesciences	22,500	2,800	5,000	4,800	17,500	Bottom Perf. 1
Divi’s Laboratories	9,500	1,800	3,000	2,900	6,700	Bottom Perf. 2
Torrent Pharma	12,500	1,900	3,400	3,200	9,100	Bottom Perf. 3
Biocon	11,000	900	2,500	2,300	8,200	Bottom Perf. 4
Granules India	5,800	500	1,200	1,100	4,600	Bottom Perf. 5

Market Timing Insight – Nifty MidSmall Healthcare Index

Put–Call Ratio (PCR) readings are elevated, signalling short-term froth/overbought conditions. Prefer staggered entries on pullbacks rather than lump-sum buys.
Short-term: Avoid chasing breakouts; wait for mean reversion.
Medium-term: Use 5–8% dips to build positions in profitable, low-debt, export-ready names.
Long-term: Structural demand intact across domestic formulations, complex generics, and CDMO.

Investment Strategies

Short-Term (1–3 months): Trade around USFDA outcomes, quarterly results, and currency moves. Prefer liquid large-caps; keep tight risk controls amidst event risks.

Mid-Term (6–12 months): Accumulate leaders on corrections if margins hold and compliance tailwinds sustain. Blend defensives (domestic-focused) with exporters (US/EU) for balance.

Long-Term (3–5 years): Core allocation to scale players with strong compliance, differentiated pipeline (inhalers, injectables, biosimilars), and CDMO capability. Track regulatory cycles and currency hedging policies.

Key Technical Levels – Nifty Pharma Index

Time Frame	Critical Support Levels	Critical Resistance Levels
Short-Term (1–3 M)	17,400 / 17,050	17,950 / 18,250
Mid-Term (6–12 M)	16,700 / 16,200	18,800 / 19,300
Long-Term (3–5 Y)	15,800 / 15,000	20,200 / 21,000

FII & DII Positions and Sector Valuation

FII holding value in Healthcare/Pharma (₹ Cr): — (insert latest NSDL sector-wise market value).
DII (Mutual Funds) exposure to Pharma/Healthcare (₹ Cr): — (insert latest AMFI sector exposure).
Nifty Pharma Sector P/E (trailing): —× (insert latest NSE Indices figure).
Note: Update these figures with the latest monthly/weekly releases before publication.

Upcoming Important Events (Next 3 Months – Pharma)

• Sep–Nov 2025: Q2 FY26 earnings season (margins, US pricing, compliance commentary).
• Ongoing (Sept–Nov): USFDA facility inspections & potential EIR/483 outcomes (company disclosures).
• Quarterly (Oct 2025): PLI Scheme milestone updates for pharma/medical devices (MoC/DoP releases).
• Monthly: NPPA notifications and pricing updates for scheduled formulations (DPCO).

Monthly: Rupee movement & US generic price-basket checks impacting export realizations.

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