Hi
Interesting to see your preference from fmcg to pharma. Barring a few fmcg names, most companies in the sector are struggling for growth even in pre covid times and things should continue for them in the same vein.
Pharma offers an intersting investment proposition mainly because
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Most of the pharma companies continued their production even throughout the lockdown. Production might have been lower due to reduced workforce, but in pharma most companies have got good automation and can do away with reduced workforce.
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An important parameter for export oriented companies has been the strength in dollar. Dollar going from 70 to 75 works very favourably for pharma companies.
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Of late there seems to be a change in stance by usfda wrt indian pharma companies. I see a lot of announcements of EIR given to various Indian companies.
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Approvals of ANDAs are getting fast tracked which allows companies to launch products faster.
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Companies in the sector are showing very good resilience in the midst of a weak market. Stocks like alembic have taken out all time highs posted previously in 2015 which says something about the strength. Others like sun, lupin, drl, cadila etc (in fact a vast majority of them) have posted fresh 52 week highs and even while correcting, have held on to levels well above their respective 200 day moving averages. These days its difficult to find stocks sustaining above the sacrosanct level.
From among all the universe of companies, pharma shows a promise of possible growth even within a world riddled with Corona scare. Money in the market ends up chasing growth stocks. And two segments where market perception of growth is strong is pharma and speciality chemicals. Pharma has a wide variety of companies in the listed space and ample liquidity which makes it easier to take decent positions for HNIs and big funds alike.
Lets see how this thesis pans out but in last few weeks I have focussed on buying in pharma space because of above reasons and logic.