Measure expected -
1. Enhancement of in-house R&D exemption limit to 250% as well as exemption extended to third-party suppliers
2. Hike in excise duty on drugs to 8%
3. Providing tax sops for setting up hospitals in urban areas
Likely impact
1. Will increase tax exemption and lower tax rates for more prolific R&D spenders
2. Negative impact on margins for all domestic formulation players
3. Positive for corporate hospital chains, which are aggressively stepping up bed additions in urban areas
Key stocks affected
1. Beneficial for larger generic companies like DRL, Sun, Lupin etc
2. Almost all pharma stocks, especially those with large contribution from the domestic market
3. Apollo and Fortis
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