| It feels that pharma companies with wider drugs pipeline, improved skill set and lower cost will see higher valuations than the sector average. |
| A K Sridhar, chief investment officer of UTI MF, said this in a communiqu"� to investors of the mutual fund. Incidentally, UTI has substantial exposure in pharma sector through its various schemes. It holds 2-5 per cent stake in companies such as Ranbaxy, Nicholas Piramal, Dr Reddy's, Aventis, Pfizer, Wockhardt etc. |
| Besides pharma, Sridhar pointed out that it is positive about steel, engineering, cement, two wheeler, banks and IT. |
| Elaborating the reasons behind UTI's bullish outlook on cement, steel and engineering, he said, "Most of the process-based manufacturing companies is running with near 90 per cent capacity utilisation. With GDP and industrial growth expected to continue growing, most industries are contemplating huge capacity expansion to meet increased demand. So the outlook for companies in these sector will continue to be buoyant." |
| Sridhar is bullish about 2-wheeler industry because of impressive growth shown in the last few quarters. He pointed out that demand for two-wheelers is emerging from both the rural and urban markets. |
| "The India two-wheeler industry showed an impressive growth in November 2004 sales. This is a good sign," added him. |
| Commenting on the banking stocks, he said that the 10-year bond yield crashed to 6.81 per cent, down nearly 45 bps from its recent high. In addition, the rupee has been steadily appreciating and closed at Rs 44.10 vis a vis the dollar and forwards are indicating further appreciation. |
| "This is very positive for banks as they benefit on the bond portfolio and pressure eases on interest rates," Sridhar added. |
| On IT, he feels that the sector will continue its good work. "Even mid-size and smaller IT companies which typically compete on price front are expected to have strong volume growth," added him. |
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