CLSA is bullish on Sun Pharma, Torrent Pharma and Dr Reddy's Laboratories in the pharmaceutical space.
The firm believes the recent rally in the sector is different as it is coming off on the back of improving fundamentals in the US, which include good approvals for select companies, enriched commentary on US pricing and progress on resolving regulatory issues.
"Improving visibility in the US and normalisation in India along with ongoing cost control measures give us confidence that 21% YoY growth in adj profits for our coverage universe is achievable," said CLSA.
The firm said stocks that are well positioned include Sun Pharma for its specialty pipeline in the US, Torrent for its India positioning and Dr Reddys as a high-risk, high-reward trade.CLSA is positive on the outlook for Lupin, Cipla and Glenmark as well.