Lupin Ltd and Aurobindo Pharma Ltd stocks moved upwards in early trade, with Lupin’s shares trading at ₹2,194.50, marking a 0.58% increase, while Aurobindo Pharma stood at ₹1,399.50, up by 0.18% as of 10:09 AM. The upward movement in these stocks is driven by recent positive developments in the US generics market, which is a significant segment for both companies.
According to a report by Macquarie, the pricing erosion in the US generics market appears to be stabilizing, a development that could be beneficial for generic-focused Indian pharmaceutical companies such as Lupin and Aurobindo Pharma. Macquarie’s commentary was further supported by Dr. Reddy’s management, who indicated that the price erosion in the US market has remained benign, suggesting an improvement in pricing stability for generics.
This news brings a sigh of relief for generic-heavy pharmaceutical companies, which have long been pressured by declining prices in the US market. The halted erosion could boost profitability and drive a rally in these stocks, especially for companies with a substantial share of revenue coming from the US generics market.
Analysts believe that this stability in pricing could positively impact Lupin and Aurobindo’s performance in the coming quarters, as the companies look to leverage this trend to improve margins. Given the importance of the US market to their overall financials, this development has led to a renewed positive sentiment among investors, reflected in the stock price upticks observed today.
