FUND VIEW – Morgan Stanley favours Indian drug firms, shuns banks (1) August 7, 2009
Posted by dhirendra1972 in Cheaper Medicine, Multipla Earnings.Tags: Aurobindo Pharma, Bad Loans, Banks' Profitability, Cadila Healthcare, Consumer Goods, Dr Reddy's Laboratories, Fund Tracker, Generic Drus, Global Pharmaceutical Industry, Healthcare, Healthcare Cost, Indian Generic Drug, Investment, Jubilant Organosys
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Good morning friends. To those people who were in a lower class, it’s important to them all the things which are cheap as they can’t afford much to buy something which is so expensive. Like with the medicine, the cheaper the drugs, the more they can afford to buy it.
Morgan Stanley believes Indian generic drug makers are good bets for investment because of the world’s drive towards bringing down healthcare costs and making medicines affordable, a fund manager said on Friday.
“My sense is that it is similar to the opportunity that we had in IT way back in 1999,” said Jayesh Gandhi, referring to India’s information technology sector, which became the hub for outsourcing to companies and governments across the world.
Gandhi, who manages about $100 million in India for the U.S. money manager, said Indian drug firms were available cheap at 6-7 times their price to earnings multiple and could show an earnings growth of 30-40 percent.
He was also overweight on utilities and consumer goods, but saw bad loans posing a risk to banks’ profitability in 2009/10.
The fund manager slashed bank bets to 10.11 percent of Morgan Stanley ACE Fund’s assets at the end of July from nearly 25 percent in December and has more than tripled holding in drug firms to 7.14 percent, data from fund tracker ICRA showed.
“One thing which is changing very, very significantly is the importance of Indian generics in the supply of global pharmaceuticals industry,” said Gandhi, who holds Aurobindo Pharma, Cadila Healthcare, Dr Reddy’s Laboratories and Jubilant Organosys.
