Bullish on MNC pharma stocks: Rajen Shah

Rajen Shah, Chief Investment Officer, Angel Broking in an interview with ET Now talks about pharma stocks.

Most of the pharma stocks are trading at PE multiples of 20 plus, why are pharma stocks still outperforming?

Well if you see MNC pharma stocks, I am bullish on MNC pharma stocks like Wyeth, Merck, Pfizer and Novartis. The interesting thing is that these, the parents are at least 100 times bigger than what they are doing here in India.

So I see this parent actually taking a serious view of their subsidiaries over here which are actually generating just revenues of 1000 crore-1500 crore or 2000 crore. I think they are doing at least 100 times more than what they are doing over here in India so the market is taking a sense of this that these companies will be Wyeth, Novartis, Merck, Pfizer. The parents will be taking a very serious look of the opportunity which is present here in the Indian market. It is a huge market 120 crore population and see the turnover of this companies vis-à-vis Indian companies.

I see serious rerating of these companies even going forward though the PE multiples could look a little richer but the potential business upside in these companies will certainly rerate these stock in the coming months.