The best performing Nifty Pharma stock this year gets an upgrade from Macquarie

The investment firm said that it has become more positive on Aurobindo Pharma due to green shoots in the US generics, the company’s large product portfolio, and its benign valuations.

Aurobindo Pharma is the best performer on the Nifty Pharma index with gains of 21 percent so far this year.

Macquarie also upgraded IPCA Laboratories Ltd. to ‘Neutral’ from ‘Underperform’ earlier. Interestingly, it gave a target price of Rs 810 on the stock, which is lower than its previous close of Rs 811 on Wednesday on the BSE.

The investment firm said that though IPCA’s estimated earnings for the fiscal year 2024-25 remain meaningfully below consensus, the concerns of further downward earnings revisions are factored in at current levels.

Shares of IPCA Laboratories have dropped nearly 21 percent in the last year. On Thursday, the stock opened slightly higher at Rs 812.20, up 0.4 percent, on the BSE in the opening trade.

With regards to other pharma companies, Macquarie noted that the Street expectations remain elevated for Sun Pharmaceutical Industries Ltd., Cipla Ltd., Lupin Ltd., and IPCA Laboratories.

Macquarie said that it believed that Aurobindo Pharma and Dr Reddy’s Laboratories Ltd. could positively surprise the markets in the fourth quarter of the current fiscal year.