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Piramal Pharma shares hit record high amid strong trading volumes

Stocks
2 min Read Sep 18, 2024
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Piramal Pharma shares experienced a significant surge of over 5 per cent, reaching an all-time high of ₹243.99 on September 11. This increase was driven by heavy trading volumes and positive growth prospects, sparking interest among investors looking to invest in stocks. The pharmaceutical sector, particularly companies like Piramal Pharma, is increasingly attracting attention as global shifts in supply chains present new opportunities. For those looking to invest in stocks, especially within sectors poised for growth, understanding these market dynamics can be crucial. 

Strong trading volumes and market response

As of 10:33 AM on September 11, Piramal Pharma's shares were trading at ₹238.70 on the National Stock Exchange (NSE), slightly below their record high. The trading volumes were impressive, with approximately two crore shares changing hands on the exchanges, which is double the one-month daily traded average of one crore shares. 

Impact of the Biosecure Act on Piramal Pharma

The growth outlook for Piramal Pharma received a boost following the passage of the draft Biosecure Act in the United States. This legislation aims to prevent the U.S. government from contracting with or providing grants to companies associated with certain "biotechnology companies of concern," specifically naming five Chinese companies. This move is expected to divert contracts in the Contract Development and Manufacturing Organization (CDMO) sector away from China and toward Indian companies like Piramal Pharma.

The Biosecure Act, passed by the U.S. House of Representatives, has been anticipated for some time, prompting U.S. drugmakers to explore alternative supply bases outside of China. India has evolved as a popular destination for these companies, and Piramal Pharma has already seen increased exploratory discussions and customer inquiries. However, the company has noted that no major decisions have been finalised yet.

Medium-term expectations and market optimism

Analysts expect the impact of the Biosecure Act to become more evident in the medium term. Bank of America Securities analysts believe that the revenue impact for Indian companies, particularly in the small molecules segment, could materialise within 12 to 24 months. Despite this timeline, the mere expectation of increased work coming to India has been enough to drive investor interest in Piramal Pharma, a key beneficiary of this potential shift.

The growing optimism surrounding this development has led to a 30 per cent gain in Piramal Pharma's stock over the past month. This strong performance highlights the potential rewards for investors who choose to invest in stocks with promising growth prospects.

Key takeaways

  • Piramal Pharma shares surged over 5 per cent to a record high on September 11, driven by heavy trading volumes and positive growth prospects.

  • The passage of the Biosecure Act in the U.S. is expected to benefit Indian companies like Piramal Pharma as contracts shift away from China.

  • Analysts anticipate the Biosecure Act's impact to be felt in the medium term, particularly in the small molecules segment.

  • The growing optimism about Piramal Pharma's future has resulted in a 30 per cent gain in its stock over the past month.