Reliance Industries Ltd (RIL) is a reasonably good long term story, said Deepak Shenoy to CNBC-TV18's Anuj Singhal and Surabhi Upadhyay.
Shenoy said the only negative thing about RIL is the fact that it's a very high debt company and yields are going up. So what even a Reliance Jio could have got at 7-7.2% yield has now moved to 8% plus.
"On a book of Rs 1,90,000 crore of debt approximately, I think the impact on their earnings is going to be quite a dangerous thing," he said, adding that, RIL's rest of the businesses likes petrochemicals to refining are doing well. So at this point from a valuation standpoint, they are not so expensive that you would say don’t buy them. The debt overhang is the only thing negative.
"We have been investing in pharmaceutical and having been beating up for a while. I think I have been investing in Strides Shasun as well. Some of the problems that were existing in the system continue to exist and they are just going away piece by piece," Shenoy said.
Talking on Sun Pharmaceutical Industries, he said the stock is getting some kind of reprieve with Halol facility. We don’t know how much is this going to impact this stock yet in terms of financial performance, but obviously it's starting to move.
"Price on pharmaceutical companies are moving up across the board and we are really considering, whether this is the time to pick up a basket and then find out which are the winners that eventually sustains and then go on with them. So, it may be better to take an approach of buying a basket today, small amount and then pushing it further," Shenoy added.
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Disclosure: RIL, the promoter of Reliance Jio, also controls Network18, the parent company of CNBCTV18.com.