The IT and pharmaceuticals sectors has emerged winners for the year gone by. The BSE Healthcare and BSE IT indices delivered returns of 53.7 per cent and 48.2 per cent, respectively, during Samvat 2076 — by far the highest compared to any other sector.
In addition, the top gainers' list of Nifty50 firms is dominated by entities from these two industries — with Divi's Laboratories, Infosys, Dr Reddy's Laboratories, and Cipla topping the returns chart. Gains ranged from 62 per cent to 95 per cent.
On the other hand, PSU stocks and banks have been laggards — with ONGC, Indian Oil, IndusInd Bank, and Coal India delivering the worst returns.
IT stocks gained from the stay-at-home theme, while pharma shares got lapped up by the unprecedented global health care crisis.
However, experts say returns from the IT and pharma sector could plateau. Credit Suisse, for instance, has cut its exposure to both these sectors. High valuations and a relatively muted growth forecast is the reason for the downgrading of IT stocks, while it sees ‘cyclical and structural’ challenges in the health care space. Nomura, too, has reduced our weight on IT and pharma.