HomeNewsBusinessMarketsDespite strong run, pharma and healthcare stocks still have some steam left, says Chirag Dagli of DSP MF
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Despite strong run, pharma and healthcare stocks still have some steam left, says Chirag Dagli of DSP MF

According to Dagli, the strong growth trajectory expected of the sector also supports its valuation metrics. He also expects the various segments within the pharma and healthcare space to perform well in the near term.

July 24, 2023 / 11:34 IST
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Dagli has been managing the DSP Healthcare Fund since 2018.
Dagli has been managing the DSP Healthcare Fund since 2018.

Even after the pharma and healthcare sector’s strong run in recent months, Chirag Dagli, a fund manager with DSP Mutual Fund, isn’t concerned about valuations stretching beyond fundamentals. He believes valuations within the sector are still far from their historical highs and also at a discount to the overall broader market, leaving more fuel for them to go further.

Dagli manages the DSP Healthcare Fund, which has been investing in Indian and global pharma and healthcare companies across the large, mid, and small-cap segments, since 2018.

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“The premium of the BSE healthcare index versus the broader indices is at a discount, and historically, or on average, it has been at a premium, so that way, I think valuations are doing fine,” Dagli said in an exclusive interview to Moneycontrol. “We’re not worried about valuations to be honest; sure, the sector has done well recently, but it’s only a bit of catch-up going on.” He also pointed out that in the past couple of years the sector has been a consistent underperformer as compared to the broader market.

According to Dagli, the strong growth trajectory expected of the sector also supports its valuation metrics. He also forecasted strong scope for varying double-digit growth across the various segments within the vast spread of the pharma and healthcare space. “I think there is a scope for double-digit growth across most segments, whether it is APIs (Active Pharmaceutical Ingredients), hospitals, India formulations or export-oriented companies,” he said.