Money managers turn cautious, value buying emerges in pharma

With markets hitting record levels and the Sensex trading at an 18-20% premium to its historical 10-year average price to earnings ratio, May was a challenging month for fund managers. Money managers became cautious because of the high valuations and were seen booking profits in consumption-oriented stocks like Godrej Consumer, Hindustan Unilever and Maruti at higher levels.

Pharma stocks, which have been beaten down over the last three months, such as Sun Pharma, Dr Reddy's and Aurobindo Pharma saw some value buying. In the financial sector, some funds were seen buying Kotak Mahindra Bank and HDFC.