Earnings, FDA concerns hitting pharma stocks: Mayuresh Joshi

In conversation with ET Now, Mayuresh Joshi, Fund Manager, Angel Broking, shares his outlook on pharma stocks.

ET Now: The wobbly pack today has been pharma underlying by the weakness right now in Wockhardt, Lupin and a few other stocks all through the trading day today. A lot of these stocks are now trading at fresh 52-week lows.

Mayuresh Joshi: Clearly one needs to really understand how the earnings of the pharma companies have been over the past quarters. On historical comparison, valuations are a little bit too stretched in terms of expectations laid out for the next four quarters. So clearly you are talking about how the earnings are expected to pan out vis-à-vis the kind of valuations that these companies are deriving.

So clearly a stock-specific approach is something that should be ideally followed within the space itself.

Secondly, a lot of FDA concerns are there for the overall industry. You are not really sure which pharma company is next. So in that sense itself, probably, a lot of news was getting played out since morning in terms of the API ban. So clearly, the pharma stocks are taking a beating in terms of how valuations are probably panning out for the larger sector as a whole. My take is that a stock specific approach is something that I will follow specifically looking forward for FY17 numbers.