Pharma stocks can give good return: Karwa

Krishna Kumar Karwa, Managing Director, Emkay Share & Stockbrokers is of the view that pharma sector should give good returns in the next 12-18 months.

Karwa told CNBC-TV18, "We have been recommending Ranbaxy for the last few months as such based on the visibility of the earnings for the next two-three years and yesterday also there has been some talk about they introducing Omeprazole drug from April ’08 onwards. So the visibility of earnings for Ranbaxy seems to be very strong and the stock has already outperformed in the last two months."

He further added, "Pharma sector as a whole, the valuations broadly seem to be reasonable and there is under ownership also. So both the things should play out well and we have a very strong buy on Jubilant and Dishman Pharma in the CRAMS space as such. But the problem is that the sector cannot absorb huge amount of money, so to that extent what kind of investments can go into that sector is a questionmark. But otherwise we believe that this sector should give you good returns in the next 12-18 months."

Disclosure: It is safe to assume that analyst and his clients may have an investment interest in the above stock/sector.