Revival uncertain, Which stock to bet on -IT, pharma or consumer stocks?


Published On: Monday, July 12, 2021 | By:

Revival uncertain, Which stock to bet on -IT, pharma or consumer stocks?

Clearly, the market has been able to take the Second Covid Wave in stride, and very strong liquidity continues to flow into the markets. In addition to that, some of the very short-term high-frequency indicators have been pretty much positive and have been in strong momentum. On the whole, the market has essentially been able to take any kind of softness in the June quarter numbers and is willing to look at the second half of this financial year and beyond. The markets probably are more in a medium-term mindset, the experts feel.

On the whole, the market still continues to receive net liquidity. In addition to that, there is a fair bit of participation from domestic investors, from retail investors and a combination of all of these things are driving the markets. The momentum in the market or the price levels are pretty much reflective of the earnings growth which companies have been reporting.

For the large cap IT services companies, there is no case for an upside from a pure PE multiple point of view.Analysts believe that a lot of the midcap IT services companies remain interesting plays.Within the overall IT pack, the companies which are doing R&A, engineering and are shifting and transforming the business models to SaaS model are to be looked for.

The pharma represents one of the best growth opportunities from a short, medium and a long-term perspective.Consumer as a space is again very interesting but experts believe that the top rung consumer companies are fairly valued but there are a bunch of smaller consumer companies which look very interesting.

In total pharma both large cap and midcap plays look attractive whereas in consumer and IT stocks, the midcap and smallcap space look very interesting.


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