Pharma pivotals recovered from their lower levels on Wednesday due to buying support from institutions and retail investors.
Cipla (up 0.73% to Rs 749), Ranbaxy (up 0.50% to Rs 623) and Dr. Reddy's Laboratories (0.59% to Rs 892.50) were among the Sensex stocks that posted gains. The BSE Healthcare Index rose from its low of 1,223.65 to 1,230.34. However, it was still 1.59 points, or 0.13% lower, from its previous close of 1,232.24.
The above three companies have 56.4% weightage in the BSE Healthcare Index.
As per market buzz, Life Insurance Corporation of India was active in all these stocks, while Motilal Oswal Securities bought Cipla and Ranbaxy.
Dealers said the buying support for these stocks was due to their attractive valuation after a recent battering. In the last one month, the BSE Healthcare Index lost 3.25%, or 41.30 points, from 1,271.95.
Meanwhile, the Union Budget for 2003-04 has sops for the pharma sector like the extension of concessional excise duty of 5% to more life-saving drugs, increased rate of depreciation on life saving medical equipment from 25% to 40% as well as extension of section 10(23 (G) benifits to financial institutions that provide capital to hospitals.
The reduction in peak import duty to 25% for bulk drugs and formulations, waiver of customs duty on clinical trial equipment, drugs and materials, reference standards for clinical trials and reduction in import duty on bulk drugs are the other sops in the Budget.
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