The Indian pharma sector is a diverse industry driven by various local businesses, US businesses, CDMA, and grants, allowing for a stock specific bottom-up approach to form. The API stocks and stock benefitting from bottoming out US demand and pricing are Trideep Bhattacharya’s pick, the Edelweiss AMC CEO told CNBC TV18 in an interview held on July 21.
Bhattacharya prefers to opt for a stock specific approach when investing in the pharma sector. He holds a neutral or marginally underweight stance on the sector overall but is bullish on certain specific stocks within the sector.
Also Read: Neutral stance on IT despite lower valuations: Trideep Bhattacharya
Top picks
The Nifty Pharma index is trading flat at 1pm on July 21 at 14,272.05. The Indian Pharma Market’s (IPM) leading index has delivered a 7.57 percent return over the past month and a 12.28 percent return over the past 6 months. In May, the chronic segment of the IPM grew 12.5 percent on-year while the acute segment expanded 10.6 percent.
The analysts stocks picks for the IPM are Torrent Pharma and JB Chemicals and Pharmaceuticals. These stocks analysts believe they are poised for stronger growth owing to their higher reliance on chronic therapies in the domestic markets. At 1pm on July 21, the Torrent stock was trading nearly a percent higher at Rs 1,946.00 and the JB Chemicals stock was trading 0.5 percent higher at Rs 2,512.95.
Analysts' view
Analysts, however, flagged caution towards the Alkem Laboratories stock, which has reported a mere 8.63 percent return over the past three months as against the Torrent and JB stocks, which have delivered 22.24 percent returns each. At 1pm on July 21, the Alkem Laboratories stock was trading flat at Rs 3,696.05.
Tata Mutual Fund’s fund manager Meeta Shetty is also bullish on the pharma sector owing to the growth of domestic units. The brokerage firm Nirmal Bang also sees favourable risk reward in the sector.
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