Dalelorenzo's GDI Blog
19May/210

Don’t go stock-specific in pharma: Deepak Shenoy

Go for some of the API players which are in manufacturing, some of the exporters and some of the formulation final drug manufacturers as well and build a portfolio rather than invest in only specific broths, says Deepak Shenoy, Founder, Capital Mind. How are you looking at the pharma basket after quarterly amounts? Where are you acquiring favour within this space? A mint of pharma results are out while others are more are awaited but overall, it has been rather feeing. We are seeing a lot of news-related moves in stocks and some of these moves are based on anything brand-new that has been discovered in terms of impact of Covid and so on. We have interpreted a few stocks rise a little bit. Last time, there was a little bit more of Covid associated build-up. After Covid quells, a lot of elective procedures will be published within India. The domestic sector will continue to have a focus on medicines in the next few years though exports are looking very encouraging. Overall, business has not slowed down or stopped. So I would go for some of the API participates which are in manufacturing, some of the exporters and some of the formulation final drug manufacturers as well and build a portfolio rather than invest in only specific stocks. Specific furnishes require a lot more deeper knowledge. How have you read into L& T quarterly demo? If we look at the overall segmental breakup, it has been quite stellar for the company! Yes, the implementation of its has been very successful. The number of prescribes they have received starting October of last year, has increased quite substantially and some of it has been non-India as well. India itself is passing through a big infrastructural ascent in all sorts of ways and that are able to likewise cure L& T. There is also the fact that LTI, LTTS and MindTree makes have been relatively softened. But these will also structure a foundation locate for the stock. We are long on that stock and so we are biased but overall, L& T is probably one of the lower quality capitals in terms of numerous to earnings and possible swelling trajectory. I hope at least the next few years will see them come up with considerably better develops. This year’s result is okay but it ogles good but I conceive the bigger thing is the growth that is ahead of us and if L& T can captivate a significant amount of the infrastructure story and the IT swelling legend. That will help its valuations greatly. There may be some corporate wars we should look forward to but give those happen and then we will talk about it. It is a very large company and can not acted as well as the market has in the last few years. Do you experience overall infra as a space that could see more the potentials and has more return possible as well? Yes. The US has not refurbished its freeway organization for a while. They started building them in the 50 s and 60 s and over years, a lot of it has fallen under disrepair. We have had a lot of calls for it in the last few years on the need to upgrade. We do not know where they are going to raise the money from. They are likely going to raise capital incomes taxes in the US for the richest of uppercase additions designers and use that to finance a large increase in infrastructure rejuvenation in a way. There are some schedules in Europe as well. It is not quite as well defined but both again have access to a lot of capital at the government end. There is also endless support from their own central banks for buying their alliances. Having said that he believes that, the narrative in India is slightly different. We will need money to upgrade our infrastructure, we definitely need infrastructure not just an refurbish but our fib is going to be limited by how complex the Covid virus issues are and how things change for the government in terms of revenues. I believe here also there is a story that has been participating in for the last 3 or four years. If it continues, we are likely to see at least Rs 100,000 -2 00,000 crore a year government spending in infrastructure. So, I mull the narration is good. But does it translate to profits? We do not know. If they develop something like public private partnerships, it may not certainly arise because the risk gets transferred to the private players and private actors usually do not have the craving for a lot of risk or the balance sheet strength for it in India. It’s nuances will determine whether the profits will flow to the private sector or not. When I say private, I mean non-government but it is a phenomenal narration going ahead. I am looking forward to seeing how challenge and steel prices and all the commodity prices shape up as well that will change financial implications. Should one be in auto right now? The negatives ought to have priced in for a few furnishes because they are probably below their 2017 rates for a lot of others. I am talking about Maruti perhaps and the two-wheeler pack and so on but Tata Engine has doing well. There are a bunch of reasons for it but the point is also that Tata Engine has now share from Mahindra. A pile of amalgamation has happened in terms of demand as over the last two or three years, costs have gone up for several intellects -- be it BS-VI, increase in insurance costs or increase in raw material rates. It has now translated into a higher cost of the vehicle itself and therefore demand has ebbed. But formerly we are past the corona the questions and one hopes that ascribe rise will start to come back. If there is industrial demand, then the needs of the personal vehicles and commercial vehicles should continue to go up. This will not happen in the next six months to a year because things are in flux but over the next two or three years, automobile is going to show a fairly significant rebound from here. We are going to see demand come back quite rapidly once things stabilise and three to five year story will still belong to the vehicles where you will have to probably represent it through both the vehicle manufacturers and too through some ancillaries who offer specifically inputs to electric cars and electric vehicles both of which I suppose will correspond to much higher growth floors in the longer term. But in the short term, I is not expect things to happen in the next three to six months at all. How have you looked at earnings from cement companionships so far? What kind of traction are we likely to see in cement? I have not even seen the results of many of the cement companies and so I do not know about volume growth here. So, I should not comment unless I have a figure. We have a plan for looking at it at the end of May but plaster has not really been a big thing for us so far.

Read more: economictimes.indiatimes.com

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