With each passing day, many top market experts are recommending various stocks and sectoral bets this Diwali. But, what is Rakesh Jhunjhunwala betting on? In an interview to CNBC TV18, Rakesh Jhunjhunwala said, “As far as my portfolio is concerned, it’s a happy Diwali.” At a time when many other top experts have advised investors to stay away from pharma sector, the investing icon has actually increased stake in the sector. In Lupin Ltd, he has increased stake to 1.89% as on 30th September 2017, as against 1.76% in the previous quarter, even though the drugmaker had actually posted a 60% slump in profits for the first quarter.
Similarly, in August this year, Rakesh Jhunjhunwala’s wife picked up 0.9% stake in Fortis Healthcare for an estimated Rs 60 crores, through an open market transaction. What is his view on the pharma sector? “Everything that could go wrong for the pharma sector, has gone wrong. The US market got very competitive. Rupee depreciated, and the pharma companies had very bad sales domestically due to GST. I would say the worst in behind us. The rebound will depend a lot on the individual companies,” Rakesh Jhunjhunwala told the channel.
According to India’s Warren Buffett, investors need not be over-bearish on the sector. “As the prices have crashed, as lot of companies will drop out and invest into generics. People are so bearish these days. So what if say, Amazon sells medicines? I think it’s a positive. Indian pharma companies will have one more buyer. The more the buyers, the better it is. Just because Amazon is selling medicines, prices won’t come crashing down.
Which companies are likely to do well? “I think companies which have very large business in India are going to do well, regardless of what happens in America. In America, those who can move to complex, who have got a good pipeline, whose research costs are not very high, they will do very well.”
Reiterating his bullishness on the Indian markets, Rakesh Jhunjhunwala says that Indian economy will grow at 12% annually. “In a growing economy like India with reasonably good corporate governance practices. I think India will grow at a nominal GDP of 12%. I see no way in which Indian equities will give anything below 15%,” Rakesh Jhunjhunwala said in the same interview.
People have taken to mutual fund investing in a big way. After Mutual Funds registered their highest ever inflows of Rs 20,362 crores in August, the inflows in the month of September totalled to Rs 18,936 crore. How long will this ‘financialisation of savings’ theme is likely to last? Rakesh Jhunjhunwala says there’s a lot moe to come! “Indian money into the market is going be a tsunami! I think it’s not even reached a flood,” Rakesh Jhunjhunwala told CNBC TV18.