Wrt to my last Article, It has been a good climb with the graphs of pharma/healthcare companies still not peaking and yet have more to come. Its Irony, but thanks to Rupee depreciating and this sector leaving stone upturned for the opportunity to spread domestically and internationally. It is nothing but an experience to learn, on how even in bad times for the overall market, a sector can perform exceptionally good. Look at lupin, Sun Pharma, Ranbaxy (20-30% up, still 10-15% more to come). Except a few disappointments like Dr. Reddy's and also GlaxoSmith (3-7% up).
But what's next?? Surely not Airlines/Telecom for a while, with the battles going on. Monsoon does not favor FMCG. The chase cuts down to IT, Pharma, Auto, banking/finance, Energy, metal or Commodities. Edible commodities like sugar, cotton have already picked up 10-12% due to foreseeing demand/supply gap(reason being poor monsoon), but still have chance of another 15-17% upside. Festival time for next 3 months indicate precious/semi-precious commodities will pick up pace but how much (Since they are already on there all time peak), another 5-10% and festive season is good for Auto sector, but the inflation and growing cost will put a break on buying so it can experience 10-15% upside. In IT sector, one needs to be selective, yet the returns will not be same as pharma has shown till now. Energy Sector with most of the PSU's stalled under the weight of subsidiaries. Metal needs to pick up in terms of demand. Banking being marred by NPA's in PSU banks and competitive margins in private banks, also inflation puts yet another hindrance, positive single digit upside expected.
