Thursday 20 November 2008

Buy pharma stocks: G Nadkarni

Girish Nadkarni, ED- Cap Markets, Avendus Advisors feels that companies, which are in the consumer sector, with negative working capital cycles or pharma companies are typically good candidates for buying.

Nadkarni told CNBC-TV18, "To be honest, in this market it is safest to buy companies, which require the least amount of cash for their growth and where growth is intact. So companies, which are in the consumer sector, with negative working capital cycles or pharma companies are typically good candidates for buying. Having said that sectors of the economy where investment is inevitable, for example in power in the next 2-3 years, whether you are seeing a slowdown right now or whether you are seeing projects being delayed or abandoned in the power sector, India needs power, it is going to be a power deficit country and for our infrastructure to grow, I think it is very critical. So sectors which are power ancillaries either in the Transmission and Distribution (T&D) side or in the generation side or companies, which help erect power plants, these are companies which you can definitely bet. These are now valued at 2-3 times their earnings and therefore reflective of deep pain, as far as working capital is concerned for those companies. But these are stocks that one should accumulate in the portfolios right now."

Disclosure: It is safe to assume that analyst and his clients may have an investment interest in the above sector.

Source: Moneycontrol

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DISCLAIMER: The author is not a registered stockbroker nor a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity, index or any other financial instrument at any time. While he believes his statements to be true, they always depend on the reliability of his own credible sources. The author recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and that you confirm the facts on your own before making important investment commitments.