InvestorQ : What is your view on pharma and IT stocks in the next Samvat Year?
Dilmini Mercia made post

What is your view on pharma and IT stocks in the next Samvat Year?

Dawn Cherian answered.
3 years ago

The first question that comes to mind is whether to invest at these levels or just say out of the market. Of course, one must look for opportunities; so staying out is not an option. One set of stocks that could be your obvious first port of call are the pharma and IT stocks.

In the midst of the chaos of last year, IT and Pharma have given more than 45% returns you. However, there are still many good stories left to be exploited. The pandemic saw people and businesses rely on technology to sustain their businesses in a big way. That is great news for Indian IT companies with digital franchises.

Be it cloud or online communication or video conferencing or artificial intelligence; the prospects for the IT sector are endless. The world will need the best of Indian technology companies to cut costs and increase output. Most valuations are still reasonable so the drive could well come from this sector.

Pharma will be more a mixed bag and opportunities will be more specific to niches. Traditional formulations will benefit from lesser FDA regulations but the pharma cream will be focused. Watch for pharma companies that bag orders for manufacturing and supplying vaccines and anti COVID drugs. That could be big business in the coming years.

Another niche to play will be the makers of active pharma ingredients or APIs. Global companies are looking for a veritable alternative to China and India could insert in that space. CRAMS space could benefit from the government focus on Atma Nirbhar program. Pharma and IT are surely going to be two sectors to watch out closely for.