Sun Pharma, Cipla, Ranbaxy slip for second day in a row; EM currency rout may hurt

NEW DELHI: The S&P BSE Healthcare index was the one of the top sectoral index loser on the Bombay Stock Exchange, weighed down by losses in Sun Pharma, Lupin, Cipla, Aurobindo Pharma, Glenmark and Divi's Laboratories.

Shares of pharma companies with a significant exposure to the Russian market as well as other merging market currencies slipped for second day in a row as concerns over the falling rouble led to panic-selling among traders. The Russian drug market is estimated to be $16 billion.

According to analyst estimates companies like Glenmark, Torrent, Cadila and Ranbaxy have close to 15% of their revenues coming from Russian market, ET reported.

Though the rupee depreciation should help the companies to gain in markets like the US, in Russia most of these companies trade in local currencies.

Rouble, which saw a steep fall since 1999, has raised fears that Russia might be heading towards difficult days, with the backdrop of a sharp drop in oil prices.

According to experts, currency crisis in emerging markets could result in earnings downgrades which is also leading to some bit of panic among market participants.

Higher export realisation due to rupee depreciation may get cancelled due to forex hedges and slowdown in other markets, Reuters reported quoting Motilal Oswal.

Impact of currency depreciation in Russia, CIS and Latin America on FY16 earnings, added the report.