Pharma to stay bullish on US recovery, more outsourcing: Dhiraj Sachdev

In a chat with ET Now Dhiraj Sachdev, Senior VP & Fund Manager-Equities, HSBC Asset Management shares his views on pharma stocks. Excerpts:

ET Now: What about pharma, because at a time when the market is somewhat struggling to even hold on to 6150, you have had the pharma index hit a lifetime high. What is it that you like out of the pharma space?

Dhiraj Sachdev: What is again evident in the pharma space is that new product launches in the US generic market is fairly strong and many companies are actually entrenching bigger outsourcing of the molecules or products, whether it is Para IV or some of the Para III products or complex molecules.

So you might actually see greater predictability and visibility, in terms of earnings growth from many pharma companies. Again US recovery and greater outsourcing will sustain the momentum for pharma earnings.

Again, the business is very similar to IT, in terms of capital efficiency, higher ROEs and better earnings growth. So the sustainability of earnings growth and capital efficiency makes it a core holding in many portfolios for the long-term.