The pharma industry is passing through a period where the new generation is working hard on R&D for development of new molecules. At the same time the Government is pressurizing the industry to control the rising prices. It is because the rise in prices is effecting the Healthcare budget allocated by the Government .
Under the present circumstances the stock holders can be benefited if new molecules see the light of the day while at the same time prices are kept in check. So, the stock holders should invest in companies having a R&D infrastructure and who are also initiating research. Rupee continues to fall as compared to dollar. So, the exporters of medicines also stand to gain there by making them suitable companies to invest on stocks. Of late the trend had been towards downward slide as far as pharma shares are concerned .
The value of most shares have decreased during the past one year. Among them Cipla , Lupin , Biocon , Glenmark and Cadila are glaring examples. Hence, investors should avoid these companies. However , Sun Pharma , Divis lab and Dr. Reddy’s have shown some improvement recently thus encouraging small investors to consider these companies. They can start doing it through SIP plan. SIP has the inbuilt provision of investing small amounts on monthly basis without ascertaining the market scenario or rise and fall of share prices. So, its a relatively risk free proposal for the beginners as well .