Cipla, Aurobindo, Torrent are 3 preferred picks of HSBC on healthy Q4 expectations

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Sun Pharmaceutical Industries, Lupin Ltd , Dr Reddy's Laboratories Ltd , Aurobindo Pharma , Cipla Ltd , Torrent Pharmaceuticals , Zydus Lifesciences have seen their stock price rise 27-133% in a year . As most of these companies trade near 52-week highs, Lupin leads the gains with Multibagger return of 133% in a year.

The strong growth in the US markets led by large product launches has helped drive earnings growth leading to gains for Sun Pharma, Lupin ,Dr Reddy's , Aurobindo , Cipla , Torrent , Zydus and share prices of others too. The growth in base business in the US that had remained under pressure for many pharmaceutical companies is also showing signs of improvement for Sun Pharma, Lupin ,Dr Reddy's , Aurobindo , Cipla , Torrent , Zydus and others.

Also Read- Q4 results review: IndiaMART InterMESH zooms 10% despite target price cuts as Q4 PAT jumps 79% The domestic growth momentum on the positive side also remains strong led by Chronic segment. Those Pharma companies having higher exposure to acute segment though may be facing some headwinds due to lower growth of acute segment of drugs, nevertheless the strong US growth is cushioning overall earnings of most companies.

This is positive for Sun Pharma, Lupin ,Dr Reddy's , Aurobindo , Cipla , Torrent , Zydus and others share prices. Analysts at HSBC India Equity Research in the Q4 earnings preview said that they expect good 4Q for most of the names they cover with healthy sales in the US offsetting slow India sales growth.

HSBC analysts anticipate a respectable quarter where important US launches (such a generics of multiple myeloma treatment drug Revlimid) and steady US generic price balance out unfavorable seasonality in India (domestic) sales. Also in their