Sector Focus: Pharma | Stocks and Commodities

December 27, 2015
Time: 9 am

Sector Focus: Pharma

1. I have given my view about Real Estate Sector first as it is not only related to stock market. People also invest in Real Estate directly.
2. Since I have taken a negative sector, now I am focusing on a positive sector, Pharma.
3. Pharma sector has done very well in the last few years.
4. Pharma is considered as a defensive sector and should do well in a bear market.
5. In my opinion, we are in a long term bear market.
6. Nifty hit a high of 6300 in 2008 and then after 7 years, we are still below 8000.
7. We are far better, but markets like China, Brazil, Russia are even worse.
8. China index was 6100 in 2008 and now it is still below 4000 after 7 years.
9. The way things are moving, commodity price crash, US rate hike affecting emerging economies, etc it seems that the world is going through a long bear run.
10. So Pharma sector is expected to do well going forward also.
11. Auro Pharma has given more than 1000% return in the last 5 or 6 years.
12. I expected some developments to happen through online sales of drugs.
13. But there are lot of short comings.
14. Even online stores are not selling Generic drugs without prescription.
15. Doctors prescribe only branded drugs, patients may not be able to dictate the doctors regarding Generic drugs.
16. About 30 years before, average life span of an Indian was 54 years.
17. Now it is more than 75 years.
18. So people focus on health care and hence Pharma sector is likely to do well over a longer period of time.
19. But Pharma shares likely to move lower due to US FDA warnings as a knee jerk reaction.
20. So long term investors should use this kind of falls to accumulate for long term.
21. Drugs manufactured in India is still cheaper compared to many countries.
22. So I expect the positive momentum in Pharma sector to continue in 2016.
23. There is value in stocks like Auro Pharma despite such a spectacular run up.