From here on, Bajaj Finance could be an outperformer: Sandip Sabharwal
Sandip Sabharwal, asksandipsabharwal.com, says given three-four years of underperformance by Bajaj Finance, the growth in the balance sheet and their ability to reasonably control asset quality even at a time when the pressures are growing, combined with a potential monetary easing cycle, holds it at good stead. From here on, there is a very high probability that Bajaj Finance could be an outperformer.
The pharma sector is growing at 6-8%. It is even lower than India's nominal GDP. There are specific companies which may do 15%. An odd outlier may do 20%. But the excitement in this space of late has been absolutely palpable. Why is that?
Sandip Sabharwal: Sectors go through cycles. Pharma had a big up cycle and outperformance cycle many years back, then it fell out of the radar and then stocks became very cheap. So, when stocks become cheap and then there is an improvement in profitability cycle led by lower input costs and higher sales, then even a 8-10% growth in sales can lead to a 15-20% or more growth in profitability and that is something which we have seen for many companies and that has led to another round of re-rating.
The second is the CDMO story. That is more on the smaller companies like now and many mid-size companies, so many investors are interested in that. I do not buy so many mid or smallcap pharma companies due to my inability to understand their balance sheets and cash flows. But then there are companies which are doing work there and getting investor interest.
Anything in the mid-tier banking
