Buy Gland Pharma on corrections as the largely B2B pharma company has an amazing business model, said Dipan Mehta, Director of Elixir Equities on Tuesday.
“Gland Pharma has an amazing business model. It is largely B2B but the most important aspect is that it is into the injectables market. There was some initial anti-China sentiment which led to the poor performance of the IPO, but thereafter a lot of institutions have been buying into that stock. Pharma, in any case, has been quite favoured sector within the stock market and Gland Pharma being a new entrant and the kind of business model it has found favour with many investors. Yes, valuations are slightly on the higher side, but maybe at corrections one can look at buying into Gland Pharma as well,” he said.
On Asian Paints, Mehta recommends a hold on the stock. However, he believes it is not the right time for fresh investments into the stock.
“There is a new investment trend of buying the market leader no matter what. If you like a particular story, trend or industry, then everybody is migrating to the market leader which then starts trading at a significant premium. Asian Paints per se also, the company has got very loyal shareholders, very low floating stock, and then it is part of the indices. So, when you have foreign money coming in, irrespective of the valuation they need to get into a stock like Asian Paints just to get the allocation right. That also drives stock prices up. I think if you are an Asian Paints investor, it is a great time to remain invested and ride through the corrections which may come. However, making a fresh investment, I am not so sure at this point in time because you may see a period of underperformance in your portfolio if you hold Asian Paints. So, from that point of view Asian Paints at best is a hold, would not consider fresh investments,” he said.
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