Bullish on Glenmark and IPCA Labs in mid cap pharma sector: Tirthankar Patnaik

In a chat with ET Now, Dr Tirthankar Patnaik, Director, Strategist-Institutional Research, Religare Capital Markets Limited, shares his views on pharma space.
ET Now: On the entire pharma space, do you think that can still continue to be the big bet into 2014 given the export potential plus the generics business?

Dr Tirthankar Patnaik: The macro drivers that are active for the IT space will continue to help the pharma space. For Sun and Lupin, both, we expect about 25% earnings growth next year.

We have in our portfolio about a 500 bps overweight on the IT space and about 300 odd bps on the pharma space with Sun and Lupin as our key picks.

We also like Dr Reddy’s. Amongst midcap, we like Glenmark, we like Ipca so these are some of the stocks that we really like and we see no reason, as I said earlier, to change our model portfolio at this point.

ET Now: Just to have a followup point there – 2013 has been a very strong year for IT and pharma, so on top of good 2013 you expect that IT and pharma will give a double digit return so that is a very high conviction call is not it?

Dr Tirthankar Patnaik: Market fundamentals are not tied to calendar years. The macro drivers that took IT and pharma to such levels continue to work forward right now.

When we see and we are very keenly watchful of any turn that happens in the domestic macro, any clarity on inflation going forward and I am not talking about food inflation here.

We would be the first ones to actually turn around and push aggressively for financials and other rate cyclicals that have massively underperformed, I am just saying that at the moment we do not see any kind of change in the macro that will change our portfolio positioning.