According Mayuresh Joshi of Angel Broking, one can hold stocks like Apollo Hospitals and ITC.
Mayuresh Joshi of Angel Broking told CNBC-TV18, "As a space, I remain very optimistic, very few listed players apart from Fortis Healthcare, there is Apollo Hospitals and there is a very small player by the name of Kovai Medical Center and Hospital. But largely, Apollo Hospitals' performance has been exemplary in terms of an average operating revenue per bed, the turnover time is pretty reasonable as well and considering the kind of impact that medical tourism is expected top have on the overall sector per se, the healthcare space, specifically the hospitality segment looks good. The pharmacy has again shown a very decent performance over the past few quarters."
"So again valuations might be a question mark at this point of time, but if really one has a long-term view, my own sense is that with the kind of under penetration that listed players have and with the kind of expansion plans, specifically for Apollo Hospitals, this stock can do well over the next 2-3 years. So any investors holding the stock should hold on. Potential investors probably can look out for significant declines and buy in a staggered way," he said.
"In relation to ITC, the possibility of additional cess being levied, yes, the distinct advantage is that ITC probably enjoyed in terms of the stock price movement, considering the kind of expectations from GST, that would probably get offset in a large way. So to that extent, the volume decline that the markets are probably expecting in terms of the cigarette business per se gets compensated with the price hikes that the company takes."
"Largely, if you are looking at the second possibility, if it does not happen, the valuations for ITC is still very attractive within the entire FMCG universe. And even the other FMCG business, the earnings before interest and taxes (EBIT) margins thereof are expected to do reasonably well in this quarter. The hotel business probably might struggle a little bit, but again the agri-trading business and the paper board business should probably support things though the EBIT contributions for cigarettes still remains extremely strong at this point of time."
"So again, it is an if-but scenario at this point of time. The stock has moved up significantly from lower levels, but even at the current juncture, the valuations look attractive. So even in the case of a cess coming through additionally, the benefits that the company was probably enjoying, in terms of the pricing advantage of the tax arbitrage benefit in terms of what could have got levied as a base for the coming year, that probably gets nullified.""So investors should keep a watch on the developments thereof. But at this point of time, at least till these developments come through, it is a clear hold from my side," he said.