These market watchers are excited about the pharma space - Here are their other near-term bets

Market watchers like Anup Maheshwari and Ajay Srivastava are bullish about the pharma space because of the falling rupee rate. Maheshwari, who is the co-founder and CIO of IIFL Asset Management sees some interesting opportunities in the sector.

“We have a bit of a soft spot for pharma although it has not done very well. I think as a sector, it does tend to create long-term value. So within pharma, we are finding some interesting opportunities,” he said.

Ajay Srivastava, the CEO of Dimensions Corporate Finance Services believes that the sector is like a flower which blossoms once in 20 years.

“You need to catch it at once in a 20-year phenomenon,” he said.

“I think there are a lot of companies, which are very undervalued in the pharma space. Most companies have been valued in the single-digit piece kind of stock and they will gain tremendously from rupee dollar depreciation. There is no doubt about it,” Srivastava added.

In the last 20 years or 15 years, pharma has been the biggest loser in his portfolio in terms of return to capital employed. So the fact remains that the sector has underperformed.

According to Srivastava, the rupee-dollar is going to give the biggest kick to them just like it'll give the kick to commodity companies no matter what you do.

He thinks the rupee dollar should give a clear 10-15 percent edge to all pharma companies no matter what the growth rate is.

Maheshwari is also focused on consumer discretionary space going forward. “Some of the consumer discretionary names look interesting,” he added.

He doesn’t have much exposure to the real estate space. “It is not an area that we focus much on in our portfolio for the simple reason that we struggle to find companies in that sector that are capable of delivering more than 15-20 percent return on equity,” he said.

Rising interest rates will incrementally impact demand in the real estate space, Maheshwari added.

According to Maheshwari, two sectors in India matter a lot - Financials and IT makes up 50 percent of India’s wage bill. “Financials is doing quite well and things continue to be on a fairly good trajectory for financials. Financials remains one of the long-term sectors to – if you are investing in India, this has to be a core part of your portfolio,” he said.

Srivastava believes that themes like power transmission investment trusts, etc. have given phenomenal returns. So if those products – the newer ones - come to the market, they become better. “I know it's less exciting. I know it is not the thing which gives you the kicks but if you want kicks go skydiving, equity markets perhaps is not the place,” he mentioned.