Pick defensive pharma stocks to hedge against global risks: Ajay Bagga

In a chat with ET Now, market expert Ajay Bagga shares his view on the pharma space.

ET Now: Pharma counters are not taking cues from the currency market. There has been a bout of correction in almost every pharma name. Valuations are no longer sky-rocketingly high, but rich. What do you do with the pharma names?

Ajay Bagga: One can look at pharma names. The sector will keep on growing. If you even look at global players, the kind of numbers that are coming through from the US and the Europe are quite encouraging.

A lot of M&A activity is also happening which will generate more value for shareholders.

We enjoy a natural advantage in the pharma sector. Hence, price-to-earning (PE)ratios are stretched.

Even as we have seen some institutional investors pulling out money from pharma counters, I would suggest investors to own pharma stocks from a multi-year perspective.

Even from a short-term point of view, pharma stocks may serve as a natural hedge against the US Fed move later in the year. You will have some impact on rupee fo sure. I would say keep pharma stocks in the portfolio.