Pharma sector back in focus; outlook positive but bets likely to be risky

Things are further improving for companies focussed on the US. Many large generic US players are moving out of certain drugs, which creates opportunities for the Indian players

As the outlook for pharmaceutical companies improve, returns from mutual funds representing the sector have outperformed all equity schemes in the recent past. The average three-month return of pharma funds is 13.48 per cent. All other equity schemes have single-digit returns except technology funds (10.33 per cent) in the same period.

The same holds true for one-month returns. Average returns of pharma funds are at 8.59 per cent. Average gains of other equity schemes are below one per cent except for technology funds, which are at 4.42 per cent. Pharma sector had faced many challenges between 2015 and 2017. There