Beaten down pharma stocks provide buying opportunity: Deven Choksey

In a chat with ET Now, Deven Choksey, KRChoksey Investment Managers, shares his views on Larsen & Toubro, Reliance Industries.

ET Now: There was an ET Now exclusive that we just broke about half an hour back on Wockhardt where the focus was really about how the USFDA is inspecting their Shendra plant, if clearance comes through they would be able to start exporting to the US again, do you think that is the kind of green signal one would want to see given the pain the business has gone through and the kind of focus the USFDA has had on pharma companies in India?

Deven Choksey: Certainly, I think any company which is correcting its position and probably getting ready once again to meet with the compliance norms of the USFDA, it is a more than welcome situation for the company. So, to my mind there is no doubt about it, even as an investor you would like to see the situation going forward remaining stable for these companies.

USFDA, definitely, is after Indian generic companies and they are definitely trying to ensure that the companies stay up to the standard or bring up the standards. Yes, I do agree that over this entire episode of finding out fault, and thereafter, correcting the situation could result into the better times going forward for the pharma companies but unfortunately, many of them today will have to struggle for the next one year in bringing up their facility back into the USFDA approval norms.

So, to an extent for the pharma space in, general, those companies which are troubled by USFDA for now would probably stay a little troubled for a couple of more quarters after which the situation should start getting normalised further. In the corrective downside in the market, certainly, one would keep an eye on buying them because I think this is the time probably to look at those companies which are beaten down on the valuations. They are offering good opportunity at lower levels so certainly in next couple of quarters we would consider adding further into the pharma portfolio after the correction part is gradually taken care of.