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Correction in stock shows investors reacted before probe against Sun Pharma, says Emkay Global

Allegations against pharma major Sun Pharma is a cause of concern for the firm, said Krishna Kumar Karwa, managing director of Emkay Global Financial Services, adding that the correction in the stock price indicated that the investors had reacted even before the investigations were completed.
Markets regulator Sebi is likely to reopen an insider trading case against Sun Pharmaceutical Industries as well as probe alleged lapses by some of its promoters and other entities in raising funds overseas, sources said.
The development comes after a whistle blower reportedly approached Sebi with a document alleging various irregularities by the company, its promoter Dilip Shanghvi and others, they added.
Sector specific, Karwa said that he was positive on passenger vehicle (PV) space from a long-term perspective. However, he is not so upbeat on the two-wheeler segment due to high competition.
According to him, infra companies seem to be in a sweet spot in terms of order book. "The valuations of infra companies are also trading at reasonable levels," he said, adding that one can expect reasonable returns from them.
Karwa said November witnessed a lot of macro positives for the market such as fall in crude prices, which helped the market strengthen. Moreover, corporate performances have been decent and flows into domestic mutual funds have been robust along with positive FIIs flows for month of November, he said in an interview with CNBC-TV18.
According to him, the only challenge is that the breadth of market has not been good and the rally has been led by the largecaps.
“The positioning of the market seems to be light, so there are more legs to the rally which we have seen in the market but the caveat is that the breadth of the market needs to improve substantially," he said.