Cadila a significant bet among pharma stocks: Gajendra Nagpal

In a chat with ET Now, Gajendra Nagpal, CEO, Unicon Financial Solutions, shares his views on the outlook of KRBL.

Do you think there is an M&A story building up in the pharmaceutical sector?

Absolutely, I believe that India offers a unique position in that sense because the R&D costs are fairly low compared to those in the eastern part of the world like Japan or western part of the world like the US and Europe. Apart from that, we have been able to scale up our companies to world-class facilities. Some of the companies like Dr. Reddy's and Glenmark have been making their global marks. There are smart mid-sized companies that are offering great opportunities to these principal companies to come and may be have a significantly favourable tie-up with them or may be buy them outrightly. So to that extent, I believe the way health costs are going up in the world, there is a unique opportunity there. Cadila is a significantly good bet. There is a huge scope for pharmaceutical companies to go up despite the fact that we have seen a considerable run-up because there could be FII buying and there could be another strategic buying. Strategic buying is at the back of the mind of every investor, which is why these companies are trading at a higher PE multiple and continue to enjoy the PE multiple premium.