3 Stocks to Fight the Covid-19 Scare!

Till the last week, if anyone would have said to worry about the comeback of Covid-19, we might have laughed it off. But this week seems to be totally opposite, all thanks to the out-of-control Covid-19 situation in China which is raising concerns for other nations as well, especially the neighboring countries such as India. 

While investors’ risk appetite is abating due to the looming global uncertainty regarding the new wave of the virus, their focus has again shifted to the pharma space, exactly what we witnessed at the beginning of the pandemic in March 2020. If you are looking to take a defensive stance in this gloomy environment, here are 3 shares that the market participants are betting on.

Morepen Laboratories Limited

Morepen Laboratories Ltd (NS:) is a pharmaceutical company that operates via 4 segments – Active Pharmaceutical Ingredients (API), Domestic Formulations, Diagnostics and Over-the-Counter (OTC).  The company has a market capitalization of INR 1,868 crores and its share price surged over 38% this week.

The thing with this company is, last year it signed a pact with The Russian Direct Investment Firm (RDIF) to manufacture Russia’s Sputnik V vaccine at its own facility in Himachal Pradesh. On the speculation that vaccine production might again come to full swing is helping the stock to scale to higher highs.  

Granules India Limited

Granules India Ltd (NS:) is a large-cap pharmaceutical company with a market capitalization of INR 7,920 crores and manufactures finished dosages (FDs), pharmaceutical formulation intermediates (PFIs) and active pharmaceutical ingredients (APIs). The stock has not risen much in the recent past, but it clearly outperformed the markets with a gain of 1.1% this week.

Granules India is one of the largest manufacturers of Paracetamol in India, which was widely used during the Covid-19 infection to treat symptoms such as high fever, body ache etc. At once, the demand for Paracetamol shot up to unprecedented levels, so much so, that sellers started hoarding it for supernormal profits. The massive surge in its usage in case the Covid-19 situation becomes serious is what luring investors to Granules India.

Divi’s Laboratories Limited

Divi’s Laboratories Ltd. (NS:) is a large-cap active pharmaceutical ingredients (APIs) and Intermediates manufacturer with a market capitalization of INR 92,805 crores. The stock delivered a good return of 5.3% this week and surged to the highest level since mid-November 2022.

One of its generic APIs is Molnupiravir which is an antiviral that has been proven to help in a quicker recovery for patients infected with the Covid-19 virus, according to a study published in The Lancet journal. If the virus strikes again, the demand for Molnupiravir would likely go up, leading to higher revenues for the company.