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The pharmaceutical industry, particularly in the United States, is undergoing significant shifts, posing challenges for companies striving to maintain profitability. Aditya Khemka, manager of Healthcare at InCred PMS, sheds light on these dynamics in a recent CNBC TV18 interview, emphasizing the complexities surrounding compliance issues and market dynamics.

Navigating Compliance Challenges

Khemka highlights the persistent compliance issues faced by Indian pharmaceutical companies operating in the US market. Despite their longstanding presence, compliance with FDA standards remains a daunting task. While significant progress has been made, Khemka acknowledges the necessity for continual vigilance and investment in compliance measures to align with evolving regulations.

Market Volatility and Structural Challenges

The discussion pivots to the broader market landscape, with Khemka noting the structural difficulties inherent in the US pharmaceutical market. He points out that many pharma stocks are trading at historically high price-to-earnings (PE) multiples, driven partly by one-off opportunities such as new product launches. However, once these opportunities diminish, sustaining profitability becomes increasingly challenging amidst ongoing price corrections and competitive pressures.

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Identifying Investment Opportunities Pharma Sector

Despite the challenges, Khemka identifies potential investment avenues within the pharmaceutical sector, particularly in mid and small-cap companies. These firms, characterized by sustainable business models and attractive valuations, offer long-term growth prospects. Additionally, Khemka highlights the attractiveness of diagnostic companies, which are trading below historical average multiples and possess robust fundamentals.

Mitigating Risk through Diversification

To mitigate risk, companies have begun transferring key products to alternate sites. While this strategy helps ensure compliance, it also escalates costs, thereby impacting margins. Khemka emphasizes the need for a balanced approach, acknowledging that while compliance costs may rise, they are integral to operating in the challenging US market environment.

Market Insights and Future Prospects

The conversation extends to potential opportunities in emerging segments such as GLP-1 and semaglutide in the Indian market. While acknowledging the growth potential, Khemka underscores the importance of monitoring competitive intensity and first-mover advantages. Additionally, he cautions against overestimating the potential of hyped products, particularly in light of historical market trends favoring Indian pharmaceutical companies over multinational counterparts.

Conclusion

In the ever-evolving landscape of the pharmaceutical industry, navigating challenges requires a combination of compliance diligence, strategic investment decisions, and a keen understanding of market dynamics. Khemka’s insights offer valuable perspectives for investors and industry stakeholders alike, emphasizing the importance of adaptability and prudent risk management in achieving sustainable growth amidst market volatility.

In a recent interview on CNBC TV18’s Market Masters, Devina Mehra, the founder, chairperson, and managing director at First Global, shared valuable insights into the current market landscape. Mehra discussed the potential for a market crash in the mainstream large-cap segment, the outlook for India’s performance, and strategies for global portfolio allocation. Let’s delve into the key points highlighted by Mehra and their implications for investors.

Assessing Market Stability:

Devina Mehra emphasized that there is currently no significant risk of a huge crash in the mainstream large-cap segment in the medium term. She attributed this assessment to the segment’s positioning relative to long-term trend lines, suggesting that the risk of a crash is higher when returns are far above the trend line. However, Mehra also cautioned against rapid market movements, advocating for a hedged approach to mitigate potential downside risks while remaining invested for potential upside gains.

Devina Mehra Tells Importance of Hedging:

First Global has adopted a hedged approach, with Mehra indicating that they are more than 75% hedged on their portfolio. This strategy allows investors to participate in market upswings while protecting against unforeseen downturns. By maintaining a balanced portfolio, investors can navigate market volatility with greater resilience and confidence, aligning with Mehra’s risk management philosophy.

India’s Growth Potential:

Despite global diversification opportunities, Devina Mehra remains bullish on India’s prospects. She highlighted India’s potential to outperform global markets, underscoring their overweight position on India in their global portfolios. Mehra’s optimism stems from India’s long-term growth trajectory and the country’s resilience amid global economic shifts.

Long-Term View on Global Diversification:

Mehra emphasized the importance of a long-term perspective when considering global diversification. She cautioned against short-term market narratives, urging investors to focus on building diversified portfolios over time. Mehra highlighted the need for dynamic allocation across geographies and asset classes, emphasizing the fluid nature of market leadership and the importance of tactical adjustments.

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Assessing Opportunities in China:

While discussing global diversification, Devina Mehra addressed the potential opportunities in China’s market. Despite recent challenges, Mehra suggested that China’s market could offer opportunities for investors, provided they adopt a granular approach to stock selection. Mehra cautioned against overreliance on popular stocks like Alibaba, stressing the importance of thorough research and a diversified investment strategy.

Investment Structures for Retail Investors:

Mehra highlighted the availability of investment structures for retail investors seeking exposure to global markets. She recommended diversified multi-asset, multi-geography structures that offer flexibility and tactical allocation. Mehra emphasized the need for dynamic reallocation based on evolving market conditions, underscoring the value of professional management in navigating global markets effectively.

Conclusion:

Devina Mehra’s insights shed light on the current market dynamics and provide valuable guidance for investors navigating uncertain times. By adopting a balanced approach to risk management, maintaining a long-term perspective, and leveraging opportunities in both domestic and global markets, investors can position themselves for success amidst evolving market trends. As always, staying informed and seeking professional advice remain crucial pillars of sound investment decision-making in today’s dynamic financial landscape.

Neelkanth Mishra, Chief Economist at Axis Bank and Head of Global Research at Axis Capital, shares insights on key investment themes during a recent discussion with CNBC TV18, highlighting defense, electronics, and financial sectors as prime areas for investment.

Post-Pandemic Recovery and Growth Drivers:

Mishra notes the gradual alignment of investments with pre-pandemic levels, signaling a potential shift in growth drivers. Panels at the Axis Capital India conference explore emerging sectors like new energy and electric vehicles, reflecting growing curiosity about future growth opportunities.

Optimistic Outlook for the Indian Economy:

Mishra expresses optimism about the Indian economy’s outperformance compared to the global scenario. He emphasizes the potential of domestic cyclicals to perform well in the coming months, despite near-term uncertainties such as monetary tightening and global growth concerns.

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Axis Capital Sees Opportunities in the Banking Sector:

Mishra identifies the banking sector as oversold, citing concerns about liquidity tightness and its impact on credit growth. However, he expresses confidence in the sector’s resilience and hints at potential pricing discipline among banks as credit demand remains strong.

Impact of Government Spending on Various Sectors:

Mishra acknowledges a moderation in government spending, particularly in areas like railways and urban infrastructure. However, he downplays the significance of government spending as the sole driver of industrial growth, emphasizing the increasing role of private sector investment.

Shift Towards Private Sector-Led Growth:

Looking ahead, Mishra predicts a rise in private sector capital expenditure, particularly in sectors like utilities, materials, and energy. He anticipates a shift towards private sector-driven growth in industrial investments, signaling a positive trajectory for economic expansion.

Conclusion:

Axis Capital’s insights highlight promising investment avenues amidst evolving market dynamics. Investors can capitalize on opportunities in defense, electronics, and financial sectors, aligning their strategies with emerging themes to navigate potential challenges in the economic landscape.

In a recent interview on ET Now‘s “Beat The Street,” Devina Mehra, Chairperson and Chief Investment Strategist at First Global, shared insights into the current market landscape and her outlook for investors. Mehra’s analysis offers valuable guidance for navigating the complexities of the market amid various economic and geopolitical factors.

Devina Mehra’s Perspective on Market Positioning:

Despite India’s impressive performance in recent times, Mehra emphasizes that foreign institutional investor (FII) flows do not significantly influence the market’s trajectory. She asserts that the risk of a major market crash is low, attributing this assessment to India’s historical underperformance in the past decade. Mehra notes that the market is not significantly above the trend line, reducing the likelihood of a severe downturn. While short-term corrections may occur, she maintains a positive long-term outlook for the market.

Investment Strategy and Portfolio Allocation:

Devina Mehra advocates for a cautious approach, particularly regarding small caps, micro-caps, and IPOs, which represent higher-risk segments of the market. She suggests selective investments within mainstream industries, advising against a blanket approach. Notably, Mehra highlights an overweight position on India in their global portfolios, indicating confidence in its growth prospects. However, she advises against holding excessive cash, as missing out on potential market gains outweighs the risks associated with being fully invested.

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Caution on Banks and Sector Selection:

One notable aspect of Mehra’s outlook is her skepticism towards the banking sector. She points out that banks have underperformed in three of the last four years, citing concerns about credit quality and negative surprises. Mehra’s preference for PSU banks over private sector banks underscores her cautious stance on the sector as a whole. She stresses the importance of thorough analysis when selecting individual stocks, emphasizing the need to carefully assess moving parts and expectations.

Monitoring Trend Lines and PSU Stocks:

Devina Mehra advises investors to monitor trend lines closely and exercise caution with PSU stocks, which have seen significant momentum but may carry inherent risks. While acknowledging their recent surge, Mehra reminds investors of the cyclical nature of markets and the potential for reversals. She urges investors to evaluate each PSU stock individually, considering factors such as fundamentals and market expectations.

Key Takeaways:

Devina Mehra’s insights offer valuable guidance for investors navigating the current market environment. Her emphasis on cautious optimism, selective investment strategies, and careful sector allocation provides a roadmap for building resilient portfolios. By staying informed, monitoring trends, and conducting a thorough analysis, investors can navigate market fluctuations with confidence.

In conclusion, Devina Mehra’s outlook underscores the importance of prudence and discernment in today’s dynamic market landscape. By aligning investment decisions with a well-informed strategy, investors can mitigate risks and capitalize on emerging opportunities, ultimately achieving long-term financial objectives.

Explore Vikas Khemani’s outlook on PSU Banks. Gain valuable insights into investment strategies and market trends.

In a recent interview with CNBC TV18, Vikas Khemani, the founder of Carnelian Asset Management and Advisors, shared his perspective on the current state of the PSU banking sector and his outlook on new-age companies. Khemani highlighted the resilience and potential within PSU banks, particularly Punjab National Bank (PNB), and offered insights into the evolving landscape of the financial sector.

Positive Outlook on PSU Banks

Despite recent fluctuations in PSU bank stocks, Khemani remains optimistic about their future performance. He attributes this confidence to the ongoing structural reforms and improvements in governance, technology, and asset quality within the sector. According to Khemani, PSU banks have addressed significant issues that previously hindered their growth, such as governance shortcomings and technological deficiencies. With enhanced governance practices, robust technological platforms, and improved asset quality, PSU banks are poised for continued success.

Khemani emphasized the narrowing gap between PSU and private banks, particularly in terms of asset quality, governance, and technology adoption. He believes that as perceptions around PSU governance continue to evolve positively, these banks will gradually realign their valuations with those of their private counterparts. This alignment is expected to be supported by sustained improvements in operational efficiency and profitability across the sector.

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Investment Strategy and Portfolio Considerations

Regarding specific investments, Khemani discussed the case of Laurus Labs, acknowledging its recent challenges but maintaining a long-term perspective on its potential as a player in the Contract Development and Manufacturing Organization (CDMO) segment. He highlighted the cyclicality of the CDMO business and emphasized the importance of understanding and navigating through quarterly fluctuations in performance.

Assessment of New-Age Companies

In contrast to the enthusiasm surrounding new-age companies, Khemani advised against blanket investments in this space. He cautioned against the indiscriminate purchase of stocks based solely on trends, emphasizing the importance of analyzing individual business models, management quality, and growth prospects. While acknowledging the potential of disruptive technologies, Khemani stressed the need for a discerning approach to investment in this sector.

Regarding new-age companies, Khemani expressed reservations about their valuation levels, particularly in the case of Zomato. Despite Zomato’s recent profitability and market positioning, Khemani questioned the sustainability of its valuation metrics. He highlighted concerns about the long-term viability of the company’s business model, particularly in light of evolving market dynamics and competitive pressures.

In conclusion, Khemani underscored the importance of thorough research and selective investment strategies in navigating the complexities of both traditional and emerging sectors. He encouraged investors to prioritize fundamental analysis and long-term growth potential over short-term market trends.

Conclusion

Vikas Khemani’s insights shed light on the evolving dynamics of the banking sector and the nuanced approach required for successful investment in today’s market environment. As investors navigate through market uncertainties, Khemani’s perspective serves as a valuable guide for identifying opportunities and mitigating risks in both established and emerging sectors.

Disclaimer: The investment recommendations discussed in this article are based on Vikas Khemani’s insights, and readers are encouraged to conduct their due diligence before making any investment decisions.

In a recent interview with CNBC TV18, Nilesh Shetty of Quantum Advisors shared valuable insights into the current state of the market and offered advice for investors navigating through the choppy waters. With frontline indices maintaining stability while the Midcap Index experiences significant fluctuations, Shetty urges caution among investors, particularly highlighting concerns over stretched valuations in the PSU basket.

Market Evaluation and Investor Strategy:

Shetty begins by acknowledging the market’s choppy performance post-budget and emphasizes the difficulty in finding value across the board. Drawing parallels to the market conditions seen in 2006-07, he suggests that securing double-digit returns from current levels seems challenging. Hence, he advises investors to exercise caution, especially if they’ve realized significant profits or have over-allocated their portfolios. Quantum Advisors recommends a conservative approach, suggesting investors allocate only a small portion of their funds at present, with the potential for further allocation if the market offers more favorable opportunities in the future.

Assessment of Platform Companies:

Regarding platform companies like Zomato, Shetty refrains from commenting on specific stocks but highlights the broader trend of transitioning from loss-making to profit-making. However, he stresses the necessity for these companies to substantially improve profitability and cash flows to justify their valuations adequately. Quantum Advisors has not allocated funds to this sector due to concerns about over-optimistic projections required to justify valuations.

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Analysis of PSU Sector Performance:

Shetty expresses perplexity over the surge in the PSU sector, followed by a subsequent downturn. Despite initial investments in PSU companies several years ago, Quantum Advisors has gradually trimmed its positions due to concerns over inefficiency, poor governance, and inadequate capital allocation. Shetty warns investors to exercise caution, as many PSU stocks now appear overvalued compared to their private sector counterparts.

Conclusion of Insights from Quantum Advisors:

In conclusion, Nilesh Shetty’s insights underscore the importance of vigilance and strategic planning in today’s volatile market conditions. As investors navigate through uncertain times, Quantum Advisors advocates for a prudent and selective approach to portfolio management. By heeding such advice and staying informed, investors can better position themselves to weather market fluctuations and achieve their long-term financial goals.

Unlock India’s energy potential with insights from SBI MF experts. Explore opportunities and risks in the dynamic energy sector.

Introduction:

In a dynamic world where energy transition is at the forefront of global discussions, India stands poised for significant advancements in its energy landscape. Recently, CNBC TV18 hosted a compelling discussion featuring Raj Gandhi, Fund Manager, and Ruchit Mehta, Head of Research from SBI Mutual Fund, shedding light on India’s promising energy future. Let’s delve into the key takeaways from their insightful dialogue.

The Regulatory Landscape:

Raj Gandhi pointed out that the energy sector, being pivotal for national security, is subject to regulatory oversight. However, he highlighted India’s shift towards investment-driven subsidies, such as incentivizing solar panel installations and allocating funds for hydrogen sector development. Although regulatory risks persist, this move signifies a positive policy shift towards sustainable energy sources.

Bottom-Up Reforms:

Ruchit Mehta emphasized the transformative reforms undertaken to mitigate systemic risks in the energy sector. From curbing kerosene subsidies to digitizing LPG connections, these measures have minimized leakages and enhanced efficiency. Additionally, blending ethanol in petrol and doubling railway electrification underscore India’s strides towards self-sufficiency and sustainability.

Economic and Political Implications:

The transition to renewable energy not only bolsters the economy but also garners political favor. Ruchit Mehta highlighted the economic boost stemming from local energy production, which translates into profits for the populace. Furthermore, initiatives like controlling flooding through hydroelectric projects garner public support, making the energy transition a win-win scenario economically and politically.

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India’s Global Leadership Potential:

Raj Gandhi emphasized India’s capacity to emerge as a global player in renewable energy, particularly in solar and hydrogen technologies. By leveraging solar energy for green hydrogen production, India can establish itself as a key player in the international energy market. Moreover, investments across traditional energy companies in hydrogen technology signal a strategic shift towards cleaner fuel alternatives.

SBI MF Energy Fund:

Amidst a cluttered market, SBI Mutual Fund’s energy-focused offering stands out as a dedicated avenue for investors seeking exposure to the energy sector. Raj Gandhi highlighted the fund’s uniqueness in focusing solely on energy, offering investors a distinct opportunity to capitalize on India’s energy transition.

Conclusion:

In conclusion, India’s energy landscape presents many opportunities amidst evolving regulatory frameworks and transformative reforms. With a strategic focus on renewable energy and sustainable practices, India is poised to lead the global energy transition. Investors keen on tapping into this burgeoning sector can explore avenues like SBI MF’s Energy Fund for long-term growth potential and favorable valuations.

Closing Remarks on Energy Sector Potential

As the dialogue concludes, the experts echo the sentiment of a promising future fueled by sustainable energy practices and favorable market conditions. With India’s commitment to renewable energy, coupled with prudent investments and policy reforms, the energy sector offers an enticing prospect for investors seeking growth and sustainability in tandem.