BSE Healthcare Index Down 26% in Three Years - Chart Of The Day 16 March 2018 - Equitymaster
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BSE Healthcare Index Down 26% in Three Years
Mar 16, 2018


Is this the right time to buy pharma stocks?

There was a time when almost every stock in the pharma sector was considered to be a safe stock. You could just pick the top 5-6 companies from this sector and expect to make decent returns over time.

In fact, it was termed as defensive sector. However, in last two years things have changed a lot. There is enormous uncertainty in the industry.

Uncertainty regarding price erosion in the United States as well as hostile US FDA visits, have changed a once defensive sector into a risky sector.

However, we believe this could be point of consolidation in the industry i.e. with stricter norms, lower margins, and pricing pressure, the industry may see many exits and acquisitions. This could lead to relatively fewer but higher quality players.

We believe, if you can pick a niche company with good financials and strong management, this is a good time to consider pharma stocks.

Data Source: BSE, Equitymaster

This Chart Of The Day was published in The 5 Minute WrapUp - You Shouldn't Follow India's Super Investors Without Checking This First...

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