Lupin is going to show a fairly strong growth in FY12: Girish Pai, Centrum Broking

Girish Pai, Head of Research, Centrum Broking in an interview with ET Now talks about Lupin.

What is it that you like amongst the pharma space because you are seeing a portfolio churn of sorts happening and not just that sure enough there is news backing it as well, we saw it yesterday with Glenmark?

Yes, so from a portfolio construction standpoint Looking at the near term next three to six months we would be slightly overweight the pharma sector because it is a defensive though valuations are in my opinion fair to expensive there.

But the earning slow should come through fairly well on the back of probably mid teens kind of domestic growth and some strong growth in the overseas markets driven by patent expiries and my pharma analyst is talking about almost 80 billion worth of patent expiries happening from here till 2015 so that is going to drive earnings growth for the pharma sector and it is not a link to Indian interest rates or inflation and things like that. Among the different pharma stocks my pharma analyst likes Lupin as well as Aurobindo Pharma.

Why do you like Lupin?

Lupin is going to show a fairly strong growth in FY12 and even going forward in an analyst meet that they held recently they talked about mid 20s kind of growth for revenues and the expectation is that margin should hold up or improve going forward.

We should see some strong earnings growth come through for that particular company and valuations are fairly interesting from analyst standpoint.