Near-term pain likely, but long-term story intact, says Prashasta Seth on pharma space

In a chat with ET Now, Prashasta Seth, CEO, IIFL AMC, shares his view on the pharmaceutical space.

ET Now: What would you do with the pharmaceutical pack? I do not know whether you can comment individually on Sun Pharma as well. But, the stock has corrected quite a bit post fourth quarter earnings.

Prashasta Seth: I would just like to give my perspective on the pharma space.
The fourth quarter has been an issue for the pharma space as there was a pricing pressure in the US. That pressure might remain for the next one or two quarters. For companies to get out of this, they need to start getting more approvals from the USFDA.

Therefore, you have to wait for that phase to come in where new approvals start to come. My sense is that over the course of the next two or three quarters, you should start seeing improved pace of USFDA approvals.

So, if you are a longer-term investor, and you have a two-three year view, then pharma as a space has corrected reasonably well from the tops and if you have 2-3 years of timeframe and we believe that the pack has potential to give you reasonable returns from where we are at this point of time.

Hence, I would be optimistic on pharmaceutical space. But having said that, the next quarter might continue to pose challenges for the space.