Pharma's loss of clout will add shine to metals in Sensex pack

NEW DELHI: With Dr Reddy’s Labortories getting excluded from the Sensex pack on Monday, the weightage of the pharma sector in the index is all set to hit an eight-year low.

Capital goods and telecom sectors are some other sectors which have lost clout in last decade while others such as cement and real estate sectors have, for long, had no representation in the index.

In the case of pharma sector, it would now be represented only by Sun Pharma, which would have a weightage of 1.7 per cent in the 30-pack. Cipla and Lupin were shown the door in the December 2017 rejig.

The sector’s weightage in Sensex had risen from 1.1 per cent in FY10 to 8.3 per cent in FY16, only to decline thereafter.

“The weight of the healthcare sector will now be at an eight-year low, with the exclusion of Dr Reddy’s Labs and also due to the significant underperformance of the sector over the past two years,” brokerage Motilal Oswal Securities said in a note.

Healthcare is not alone. Weightages of capital goods and telecom sectors, too, have hit new lows. The capital goods sector accounted for 10.7 per cent weightage in the index in FY08, which has fallen to 4.7 per cent now. Telecom sector’s weightage has dropped from 5.4 per cent in FY10 to 3.7 per cent now.

Cement and real estate now have no representation in the index.

That said, with Vedanta entering the index, the weightage of the metal sector in the index will rise from 1.3 per cent at present to 2.6 per cent. This sector had 7.2 per cent weightage in the index in FY10.

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