"We are positive on production linked incentive (PLI) beneficiary stocks," said Randy Watts, CIO of O'Neil Global Advisors, on Tuesday. Watts said that they like Dr Lal PathLabs, Laurus Labs, and Apollo Hospitals Enterprises in the midcap pharma space.
Speaking in an interview with CNBC-TV18, he said, “I do like PLI beneficiary stocks and India is going to be a big beneficiary as offshoring moves from China into India. One thing that has happened due to pandemic is a lot of the global companies are trying to diversify their supply chain. They found that they have been too dependent on certain countries like China, I think that’s going to go to India’s benefit."
"We like a lot of the generic manufacturers in India. We also like lab companies like Dr Lal PathLabs, Laurus Labs and obviously, the hospital companies are doing well like Apollo Hospitals. So we do like healthcare in India. The other one I like is Vinati Organics in the specialty chemicals space,” said Watts.
According to him, some of the big technology stocks will continue to move up. “I would look at the leadership growth stocks in India. The stocks that have a great secular story and are going to do well regardless of the economy and a good example of that are all the outsourcing stocks,” he said.
Talking about the market, Watts said, “The pandemic is very striking right now in India, it is causing the market to be under pressure. We would like the Sensex to hold its January lows, but until we start to see a stabilisation and a decrease in cases, the Indian market and the economy are going to stay under pressure.”
“The country (India) is a bit behind the curve right now in terms of cases and also getting the vaccine rolled out. I think that is going to lead to a lot of the economic numbers in India coming down and earnings likely to be below what people were expecting for the year right now,” he said.
For the entire interview, watch the video.