Small and midcap stocks may face volatility, but long-term returns still strong: Vikas Khemani

economictimes.indiatimes.com:

«Short-term adjustments will be there, might be there, I mean one cannot really comment on that but I do not think there is anything structural threat to that,» says Vikas Khemani, Carnelian Asset Management.

What we have known from you is that you have been liking the pharma space overall and within that, you have been firm believer that CDMO space has a long way to go and I still remember a line of yours that you shared on our channel itself that Indian CDMO sector is poised for a growth similar to the IT boom of the mid-90s. But given there so many announcements related to tariff and that is the biggest headline for today, do you believe that it can actually make a dent to the structural story or do you believe that tariff imposition and this higher tariff is not likely and the structural story still remains?
Vikas Khemani: Again, do not confuse short-term issues with the long-term structural trends. CDMO is a very long-term trend. The need for that is moving away from China, diversifying the base for innovator drugs being manufactured elsewhere and US knows what their interests are, just by imposing some short-term tariffs is also counter to their interest.

So, those adjustments will be made. It is like same thing when IT was going through post-Y2K, everybody wrote off IT that IT is over as a sector, but we know that sector has grown 20x post that because once Y2K was over, new avenues of opportunities came because there was underlying need for that. So, same way CDMO is an underlying need and that will play