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Sun Pharmaceutical Industries Ltd, with a market capitalisation of more than Rs 1.6 lakh crore, rose by about 38 percent in the last one year, compared to the 48 percent rally seen in the Nifty50, and 40 percent gain in the Nifty Pharma index in the same period.

In line with the benchmark indices, the Nifty Pharma also touched record highs on Friday, at 14,715, but Sun Pharma has been consolidating in a narrow range after hitting a high of Rs 721.90 on May 11, 2021.

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Since then, the stock has been moving in a 100-point range. The recent price action pushed the stock above the crucial resistance zone of Rs 665-670, which opens the door for the stock to challenge its 52-week high of Rs 721.

Experts feel that a breakout from the resistance levels, with high volumes, gives comfort to the bulls, and the next target is placed at Rs 810, which translates into an upside of over 17 percent from the July 16 price of Rs 688 on the BSE.

Sun Pharma is India’s top drugmaker and the world’s fourth-largest specialty generic pharmaceutical company. The company develops, manufactures, and markets branded and generic formulations and active pharmaceutical ingredients (APIs) in India and the rest of the world.

“Sun Pharma has been in a long-term uptrend. The stock, unlike its peers, is moving steadily and giving periodic dips. This price action has led to the formation of a higher top, higher bottom structure, which is visible in weekly charts shown below,” Siddarth Bhamre, Director, Alternate Investments & Research, InCred Capital, said.

“This positive price structure is ensuring that the stock moves decisively above its previous resistance zone of Rs 665-670 in September 2018. From a short-term perspective, the stock is moving above its resistance of Rs 685-690, with volumes higher than the previous day in the first two hours of the trade,” he said.

Bhamre further added that long formations were observed at the beginning of the last week, which ensured a bounce from its support range of Rs 660-665. All the above factors suggest the stock may continue its upward trend.

The stock can be bought in the range of Rs 685-695, for a target of Rs 810, and a stop-loss can be placed below Rs 652. The time horizon is two months, recommends Bhamre.

Article Source:- Moneycontrol

Industry body Confederation of Indian Industry (CII) has urged for a creation of a pandemic pool as the devastating impact of the COVID-19 crisis has made financial, administrative, and social systems fragile and vulnerable.

CII said that a majority of the pandemic-related risks have been covered by insurance companies in the form of life and health claims.

However, the interruptions and halt in the economic machinery could not be covered by insurance companies in most countries as the loss due to the peril of state-imposed lockdown has not been an explicit inclusive clause in the standard insurance contracts, CII said. 

It further noted that although on an aggregate, insurance companies have been able to withstand losses caused by the pandemic, the total capital available with them is less than the capital required to absorb those losses.

"CII, therefore, urges all stakeholders to recognize the significance of having a dynamic pandemic pool which is governed by the availability of capital and modeled for greater capacity, to ensure the long-term viability of the risk management solution which is critical for a high impact-low frequency risk like a pandemic," it said.

Chandrajit Banerjee, Director General, CII, said: “The Government of India along with financial regulators including Insurance Regulatory and Development Authority of India (IRDAI) have been working relentlessly on supporting the lives and livelihood by announcing various reform measures, products (corona kavach) and packages during the pandemic."

CII said that some initial financial support from the government would be required, which could gradually be reduced to near-zero levels as the pool becomes self-sufficient with accumulated surpluses over a period of 12-15 years.

"This is the opportune time for India to have the first-mover advantage in the creation of the pandemic pool with a two-pronged strategy of going beyond the insurers and government by inviting international reinsurers to supplement capital contribution for the pool and to incentivize state governments to participate with additional supplementary capital for greater protection to their denizens," he added.

Suggesting three points in order to raise capital for the pandemic pool, CII said that Pandemic Bonds in the form of risk-linked securities could be considered to raise at least 5 percent capacity or pool limit. It also said that insurance companies can issue bonds through special-purpose vehicles another suggestion is to have a larger private partnership and to tap capital beyond the insurance and reinsurance industry by including contribution or premium paid to the pool as eligible CSR expenditure, CII noted. 

Lastly, it also suggested a GST waiver on the premium collection of the pool, similar to other government-backed schemes in order to encourage enhanced contribution from individuals and businesses to be covered under it.

Article Source:- Moneycontrol