Pharmaceutical companies have been coming back in recent times as investors look to play the defense in the market. Some Big Pharma companies are trading at all time high levels which is leading more and more to invest.
Anmol Ganjoo, an analyst at JM Financials stated that “we believe the current base reset lends itself to the creation of an environment conducive to bottom-up stock picking.”
In regard to the large cap pharmaceutical companies, investors should now be slightly more comfortable investing.
Ganjoo further stated that “from a stock price standpoint, we now find Sun Pharma attractive, besides our old favorite defensive bet, Cipla, among large caps. Also, Torrent Pharma, Alembic and Strides offer interesting entry points at current valuations.” All of this information is only meant to inform and does not suggest whether or not to invest.
The strong market is leading many to come in and begin investing such as Ajaj Bodke, the CEO of Prabhudas Lilladher who stated that “The market has scaled to a new high without any strong earning growth visibility. Under such circumsyances, investors are looking at pharma stocks as a safe haven.”
There has been a large amount of pressure in the industry due to uncertainty as to the true volatility of large cap pharmaceutical companies. One doctor who works for Wockhard Pharma stayed that “Looking at the open-interest activity, we believe this space has further upside potential.”
The industry on pharmaceutical has been very topsy turvy in recent months but hopefully that will slow down as time passes. Earlier in the week towards the end of September, Credit Suisse changed the rating of one of India’s largest pharmaceutical companys to outperform from neutral to a high target price. The pharmaceutical industry as a whole seems as though it could be bouncing back as other sectors in the market see more volatility.