Pharma profits not to surpass expectations: David Pezarkar

In a chat with ET Now, David Pezarkar, CIO-Equities, BOI AXA Investment Manager shares his view on the pharma space. Excerpts:

ET Now: What about pharma as a space, Dr Reddy’s earnings yesterday beat street estimates, but do you think the stock saw some profit taking because it has run up so much?

David Pezarkar: Absolutely, the pharma rally is largely based on the rupee depreciation and what we have seen is a period of stabilisation for the rupee. So incrementally there is not so much of a risk of the rupee depreciating from here which is why there is a reduced probability of healthcare profits being more than what people are estimating.

The markets is likely to move up or down based on whether the actual is likely to be different from the expectation and in this case it does not appear that the actuals are going to be extremely above the expectations which are already built in, which is why we have seen profit taking here and a shift to the other sectors where the actual might be slightly better than the pessimistic sort of expectations there.