Rupee-led fears overblown; Opportunity to accumulate
We believe the recent underperformance by Pharma sector stocks and fears of a further downside due to strengthening Rupee are unwarranted from a long-term perspective
– Underlying exports growth in constant currency remains very robust; Rupee appreciation-led translation/transaction losses to be a one-year affair; Base effect to play out thereafter
– Strong government is a long-term positive for the sector; Improved demographics, increased healthcare spend and more money into the hands of consumers to boost growth
– Correction/underperformance provides an opportunity for portfolio building into high-quality stocks; PEg ratio continues to be attractive; Return ratios are best in class
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