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Cipla on the block: Who's a better fit and what it means for shareholders?

India s third-largest pharmaceutical company by revenue, Cipla, is up for grabs in a three-way fight between Torrent Pharmaceuticals, Dr Reddy s Laboratories (DRL) and private equity (PE) giant Blackstone.

Analysts say it is more likely for a strategic investor like Torrent or DRL to acquire Cipla than a PE firm, which may not derive healthy returns at Cipla s current market price (CMP) after the recent gains. ....

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'Sun Pharma offers the best medium- to long-term earnings growth visibility'

India s largest listed pharmaceutical (pharma) company - Sun Pharmaceutical Industries (Sun Pharma) - is expected to maintain its outperformance vis-à-vis the sector s, as its multiple bets on specialty products, improving product mix, recent acquisitions, and branded business are finding favour with brokerages.

While it has gained 7 per cent over the past year, the Nifty Pharma Index is down 13.6 per cent.

Its outperformance over two years has been fairly evident, with the market leader gaining 66 per cent to Nifty Pharma s minus 1.4 per cent. ....

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Why Zydus is likely to continue with its outperformance

Even as most of its large-cap pharmaceutical peers have struggled to stay above water on the returns front, Zydus Lifesciences has been one of the big outperformers within the sector over the past year with a return of over 30 per cent.

The gains have come on the back of multiple triggers such as the scaling up of new product launches in the US market, clearance for its Moraiya (Gujarat) facility and steady performance in the domestic market.

Though it has been the top pharma gainer in the 2022-23 financial year (FY23), brokerages continue to maintain their buy stance, given the strong visibility in the US market. ....

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