Trump's 'Make in US' plan a worry for pharma cos: Surajit Pal

With the outcome of the US presidential elections, pharma companies are not in a sweet spot. These companies derive a sizeable income from the US and with bated breath they wait for the actions of the new president. In conversation with CNBC-TV18, Surajit Pal of Prabhudas Lilladher said Cipla's numbers are in line with the estimates. However, the company is not ready to give proper guidance. They are also indicating that there is going to be an inhaler approval coming from the UK business. Overall, the company is still in a transition phase. On Lupin's numbers, he said there is disppointment with the margin performance.Talking about Donald Trump's win, Pal said Trump's agenda of 'Make in US' is the biggest fear. If pharma companies have to open manufacturing facilites in the US, they might lose the benefits these companies are enjoying.Below is the verbatim transcript of Surajit Pal's interview to Latha Venkatesh and Sonia Shenoy on CNBC-TV18.Sonia: What did you make of Cipla's numbers and how would you approach the stock post the management commentary?A: Their numbers are very much in line with our estimates and I believe that the company still have a problem because of currency in ROW market, in South African market. The company is still not ready to give you proper guidance and they need time till February-March and they were also indicating that inhaler approval could be coming in UK business. Overall if you want to see the company is still in the transition phase into new management vis-à-vis the previous one and it will take some time to get these things and till that time it will be within this range of Rs 500-700 maximum.Sonia: The fear was that if there was a Clinton presidency then there would be a clamp down on pricing for a lot of pharmaceutical stocks. But now since that has not come through do you expect to see a relief rally on most pharmaceutical stocks continue and if yes what would be your top two or three buys now in the sector?A: It is a choice between rock and a hard place. The point is that given the kind of current scenario, be it any market US or any market, be it capitalist or socialist, if there is abnormal kind of price rise happens government or regulator will step in and that has actually happened anyway. So, those things keep on going Donald Trump also will be doing similar thing. But the Trump agenda of Make in US that is the biggest fear in the sense that if these guys have to open manufacturing unit in US then the biggest manufacturing benefits which Indian companies are enjoying might go off.For full discussion, watch accompanying video...