Ace investor Kenneth Andrade sees opportunities in the Indian stock market. Here’s where he is betting big

Kenneth Andrade, the ace investor known for his high-conviction calls, looks for businesses early into a business cycle as part of his investment philosophy. The chief investment officer of Old Bridge Capital Asset Management observed that India's market capitalisation to GDP ratio is 130%, which still indicates overvaluation. However, he still sees pockets of opportunity in the market. Andrade shared his market outlook recently during a presentation on his fund's position and where he sees investment opportunities.

Andrade’s portfolio heavily bets on the pharmaceutical industry. He says that his fund’s portfolio has 17% exposure to pharma sector. Andrade points out that Indian pharma firms account for 55% of all drug registrations in the US, the world’s largest pharmaceutical market, and hold a similarly substantial share across other regions.

“While the US is a major player, the rest of the world represents a market twice as large in the generics space, offering a massive profit pool that Indian companies are well-positioned to tap into due to their proven capabilities," he says.

Looking ahead, there is a major opportunity in the patent peak expected between 2026 and 2034, he added. During this period, drugs worth over $400 billion are estimated to lose patent protection globally. “This wave of expiries will open up a significant generics market. Indian companies, with their established presence and expertise, are poised to capture a substantial share of this 'genericization’ trend," Andrade said.

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Andrade’s portfolio largely comprises global-facing businesses rather than domestic-oriented businesses. “For example, we have