1 min read.Updated: 19 Dec 2020, 08:36 AM IST Edited By Avneet Kaur
The brokerage believes that any vaccine related opportunity would be one-time in natureIt does not ascribe any significant weightage to vaccine opportunity when picking stocks for 2021
2020 was largely about survival, both health-wise and finance-wise, it was also the most opportune time to tweak and tighten portfolios. Pharma sector made a solid comeback from the lows of Mar’20 after being lackluster for much of 2019. BSE Healthcare Index is up 60% year to date. While other sectors especially retail facing ones, whose performance depended on footfalls underwent tremendous stress in the period immediately following lockdown, healthcare demonstrated solid remarkable resilience. "The essential nature of the industry came to the fore, as frantic pre-buying of chronic drugs (diabetes, cardiac, blood pressure medications) drove growth in March," says Bhavesh Gandhi, Lead Analyst – Institutional Equities, Yes Securities.
Will the outperformance in pharma sector continue in 2021? Analysts at Yes Securities expect COVID-led drug tailwinds and pre-stocking to have ended in H1 CY20. "2021 could bring the focus on vaccine manufacturing and distribution capabilities, especially if a large 30- 40% of population is to be inoculated. We reckon companies like Dr Reddys’, Aurobindo, Cadila and Wockardt would be key beneficiaries apart from Serum in the unlisted space,"says Gandhi.
However the brokerage believes that any vaccine related opportunity would be one-time in nature and accordingly it does not ascribe any significant weightage to vaccine opportunity when picking stocks for 2021.
"Our top picks would be companies with large and fast-growing brands in domestic market like Torrent Pharma while Aurobindo and Alembic Pharma fit the bill to play the US generics growth especially in injectables and sartans opportunity respectively," says Gandhi.