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Why Pharma Sector Stocks Have Risen in the Last 9 Months?

With the outbreak of the COVID-19 pandemic, many economies faced recession. People couldn’t help but pull their hard-earned money out of the share market. Panic selling wasn’t only seen in grocery stores and retail outlets. In fact, the stock market also experienced the panic sale of stocks.

Over the past few months, the stock value of the pharmaceutical industry, however, has witnessed growth. Even though there is no vaccine for COVID-19 launched yet, people are buying the shares of Pharma industries as they anticipate the growth of this sector in the coming months.

There is no denying that the COVID-19 has pushed the Indian stock market to the bearish side.

Growth of the Pharma Industry amid the Global Pandemic

In the middle of this global pandemic and a health crisis, investors have started to realize the potential of the pharmaceutical industries.

While all industries have faced challenges during this ongoing crisis, the stocks of the pharma companies have grown over the past 9 months. It seems like the traders are on a shopping spree. Almost all types of pharma companies (except for a few) are closing with great profits every single day.

This change was noticed right after the coronavirus outbreak in India. As the government declared a 21-day lockdown in the nation, people started to invest in the pharma shares to grow their money.

Some of the main factors that are fueling the growth of the pharma sector are:

·      An increased demand for generic and branded drugs

·      India being one of the biggest suppliers of the drugs

·      The rising pharma global trend

The Nifty as well as S&P BSE Healthcare Pharma witnessed a growth of 42% and 36% respectively. This sudden growth in the shares of the Pharmaceutical sector has introduced plenty of investment and day-trading opportunities for investors. Not only the pharma sector, but the diagnostic labs have also grown in the past nine months in terms of their stock value. The stock value of two of the biggest diagnostic labs in India, i.e. Thyrocare and Dr. Lal Pathlabs went up to 14% and 20% on 16th April 2020. One of the main reasons for this growth stock price of the pharma industry was the increasing awareness of health and wellness. Another reason was the growing number of patients seeking medical care for the diagnosis and regular checkups.

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