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Worse may not be entirely over for pharma sector, says Nilesh Shah of Envision Capital

Updated : August 08, 2019 10:50 AM IST

Nilesh Shah, MD & CEO of Envision Capital, is of the view that the near-term looks challenging for Indian markets and the situation may remain the same for the next 2-3 months.

According to Shah, "The two key things that need to be done to bring back animal spirits and create the kind of bull market that we saw between 2003 and 2007 are rationalisation in taxes and second is privatisation and not just disinvestment. Cascading taxes are a deterrent to private investment."

Sector specific, he said, "The worse may not be entirely over for pharma because it is still very event-driven but it is time to start looking at it constructively. After almost two years, we have seen a stable set of numbers from the larger players in the space. There seems to be a move towards stability for the sector."

With regards to the Indian IT, he said,” IT has never looked so good, it is very well positioned especially because it is immune to slowdown back here. It benefits disproportionately with the depreciation of the rupee and the currency is likely to depreciate more.” The valuations for the sector have become reasonable and it is one sector that stands out in this current environment of softness, said Shah.

When asked if he was buying midcaps, he said, “Yes absolutely, this is a good time to nibble. Two areas that look interesting are consumer appliances space including durable, home appliance, kitchen appliances etc and industrials.”
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