Selective in pharma and capital goods; will move to overweight in IT on weakness: Trideep Bhattacharya

economictimes.indiatimes.com:

Trideep Bhattacharya, CIO, Edelweiss MF, says: “It will probably take the next year for that improvement to come through. But the valuations over the next one or two quarters would be such that they may be good to add.

On net balance, we were underweight on IT by about 300 bps at the end of last year. We moved that to neutral at the moment and in weakness we would look to go overweight.” What is your take on the pharma space? There is a sense emerging that the worst for pharma may be coming to an end on pricing pressure, inventory issues, raw material, all of which lasted for five years. Do you subscribe to that view and have you started adding some pharma stocks?I would say that yes, over the last three months or probably slightly longer, we have increased our weightage in pharma though unlike IT which is a sectoral view, in pharma we have taken a more nuanced bottom-up, stock-specific view which is we have increased our exposure to stocks which are more exposed to the US generics because that is where pricing pressure is abating.

We have to see how long it will last but for now, that seems to be the case for the next few quarters. Secondly, on the domestic-oriented companies, the commodity tailwind or shall we say lack of headwind is kind of having its positive impact on the numbers.