Pharma is a sector where people are finding comfort: Prashant Sharma, Max New York Life

In a chat with ET Now, Prashant Sharma, Chief Investment Officer, Max New York Life Insurance Co Ltd, shares his views on pharma stocks.

ET Now: Pharma companies or at least Indian pharma companies have the most risky business model. A) They are dependent on the whims and fancies of US FDA, b) they are completely dependent on how global generic prices will move. In such a global uncertain environment, why are pharma stocks strong?

Prashant Sharma: Some of these pharma companies also have strong domestic businesses. We are far more confident on companies which have a mix of both domestic and global businesses, companies that are strong in the domestic market and there is a possible upside that can come from global markets. The reason why pharma stocks in India have been performing so well is, primarily because of the same reason that I highlighted, the TINA factor. Most market participants want to position themselves defensively in an uncertain global market and in India you have the significant risk of INR weakening. So, most people are trying to play INR weakness through either the IT sector or through the pharma sector. And given an environment where IT sector has, to some extent, got de-rated because of slowing growth concerns in their own business model, pharma is a sector where people are finding a lot of comfort in terms of, at least the growth visibility is concerned.