Shares of Hyderabad-based drugmaker Gland Pharma jumped nearly 10 percent in Tuesday's opening trade after three straight sessions of losses amid reports of a bulk deal. Morgan Stanley Investment Funds Emerging Markets Equity Fund sold as many as 9,60,271 shares of the company at a weighted average price of Rs 930.69 apiece on the NSE, worth Rs 89.37 crore, according to the bulk deals data from Monday. The buyer could not be ascertained.

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Morgan Stanley was not among shareholders with more than 1 percent stake in the drug maker as on March 31, 2023. Foreign portfolio investors owned about 4.33 percent stake in Gland Pharma at the end of the March 2023 quarter, as per the shareholding data available with stock exchanges. The selling by Morgan Stanley was seen amid a selloff in Gland Pharma shares where the scrip has lost one-third of its market value.

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The stock has recovered in today's session after seeing a severe sell-off in the previous three sessions. The shares have declined more than 16 percent to settle at Rs 893.50 on Monday. This was in addition to 20 percent drop in the previous session, as the company's fourth quarter (Q4FY23) profit tumbled 72 percent on-year due to soft demand production shutdown at one of its facilities in Telangana. While analysts said the management cited multiple headwinds that hurt its Q4FY23 results, but clarity over what's ahead was largely missing.

Analysts remain cautious on the pharma stock and suggest the investors should not hurry in the bottom-fishing post the Q4 earnings. "Bottom fishing is advisable only for high risk appetite investors with strict stop loss in medium term. There are multiple headwinds for the stock in medium term in the business margins," said Kranthi Bathini, the Director of Research at WealthMills Securities.

On the technical front, support on the counter could be seen at Rs 1,000, Pravesh Gour, Senior Technical Analyst at Swastika Investmart Ltd said.

"The counter has witnessed a breakdown of a long consolidation formation on the daily chart, which suggests a bearish development in the price action. The counter is trading below its important moving averages, which reinforces the bearish sentiment. When the price is trading below these moving averages, it is often seen as a bearish signal, indicating that the overall trend may be downward," the analyst said.

"MACD (moving average convergence divergence) is supporting the current trend, whereas the momentum indicator RSI (relative strength index) is also negatively poised," Gour said.

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"On the upside, Rs 1,000 is the psychological support level; above this, we can expect a short-term rally till Rs 1,100. But traders and investors have to be advised to please avoid such a counter for intraday or short-term rallies. On the downside, the level of Rs 850 is likely to act as immediate support," he noted.

Vaishali Parekh, Vice President - Technical Research at Prabhudas Lilladher said: "The stock has witnessed a huge erosion recently slipping from 1380 levels to hit a low of 860 level and thereafter has witnessed slight pullback. The overall bias is very weak and for the trend to improve, the stock would need to cross atleast above the 1040-1050 zone to anticipate for some further bounce back. The support downside would be now 860 zone."

First Published:May 23, 2023 11:16 AM IST