Pharma, Capital Goods stocks new darlings of fund houses

Fund houses used the weakness in the mid- and small-cap space to accumulate select pharma and capital goods stocks where valuations are reasonable and companies have potential for growth.

India pharma companies’ progress in complex generics, stable US pricing and steady sales growth in India led to fund houses buying into stocks like Alembic Pharma, Divis Labs, Glenmark, Medplus, Orchid and Sanofi Consumer.

Some fund managers bought into capital goods companies as they believe we are at the beginning of the capex cycle and it is likely to continue for the next 5-7 years as they focus on PLI, renewables, and energy transition. This has led to funds managers buying into stocks like GE Vernova T&D, and KEI Industries.