Pharma doing well, but one needs to be aware of what's going on with the companies: Jonathan Schiessl

Jonathan Schiessl, Deputy CIO, Westminster Asset Management, says: “We have only a small amount of exposure to the pharma sector at the moment. Just one name. But yes, there are some interesting companies. Clearly, there are always other factors at play, be it FDA checks, and what is going on on the export side as well. It is an interesting sector, but one has to be very aware of what is going on with the underlying names.”How are you approaching the pharma names here in India because we have got a massive variety of healthcare, the entire bouquet, right? Pure play, generics, diagnostic, you name it, and you have it here. Which part of the entire value chain do you like?
Jonathan Schiessl: That is an area where there is a lot of focus. And as you say, there is a whole variety of different companies doing different things and at the moment, we only have one position in that space. Obviously, the question is, are you looking for domestic growth or obviously, the traditional more export type names in the area?

I think as a pack, they have done pretty well and more recently, is that a defensive push or is that the whole sector going to get a push up again? We have only a small amount of exposure to the pharma sector at the moment. Just one name, as I mentioned. But yes, there are some interesting companies. But clearly, there are always other factors at play, be it FDA checks, and what is going on on the export side as well. It is an interesting sector, but one has to be very aware of what is going on with the underlying names.

Assuming that any of these two Indian companies actually demerge their cricket franchises and list them separately, would you buy them?
We do not talk about cricket in the UK. Anyway, clearly, these franchises have considerable value for the parent companies that do own them. Are they making money from the individual franchises? I think obviously, before listing, we would have to understand the business models. Are they profitable? If you just look at some other sports franchises listed elsewhere, a lot of them burn a lot of cash. So it is an interesting sector, but one would probably need to understand the financials a bit better before being able to confirm whether we would look at them.

What about the other themes which are doing quite well in the market, real estate, consumption, and the entire premiumisation wave? Do you think this could be a trend where you can make money as well in the stock markets?
The premiumisation theme is not a new one. It has clearly been one of the major stories around the whole Indian markets as consumers push them into better premium, better branded products. So definitely, it is a huge opportunity for many companies in India today, be they domestic or multinationals who are operating there. So yes, a very important thing.