Domestic pharma companies may see a phase of consolidation: Ajay Parmar, Emkay Global Financial Services

Ajay Parmar, Head - Institutional Research, Emkay Global Financial Services, in a chat with ET Now talks about midcap and small cap pharma.

Do you like anything in midcap and small cap pharma?

JB Chemicals has done well. Glenmark has given better than expected results. Other than that, those who are having more income from the domestic business, there certainly you can see margins declining. This is a situation when they have increased their sales force and these sales force immediately does not convert into incremental revenue. It takes at least 6 months to one year.

So right now those companies like you can take it Ipca or Unichem or Torrent Pharma the current profits are little muted because of this incremental investment they have made. At the same time all of us are very optimistic on the domestic growth numbers which has come little lower than what was expected by the street. So I believe to some extent in the domestic pharma companies there will be a phase of consolidation.