Three Sectors Pankaj Murarka Sees Booming In The Next Decade
The combination of low cost of labour, reduced tax rates, and the PLI scheme make India an attractive option for companies.
Pharmaceuticals, technology and manufacturing are three themes that will play out well in India over the next decade, according to veteran investor Pankaj Murarka.
“The contract research manufacturing space in pharma is burgeoning,” Murarka, founder and chief investment officer at Renaissance Investment Managers, told BloombergQuint in an interview. “Global pharma companies are outsourcing their manufacturing to India to optimise their R&D expenses.”
“The same work done by scientists in the U.S. can be done in India at one-third of the cost,” he said, highlighting that every year India produces competent science professionals to undertake such work.
The second theme, according to Murarka, is the tech and internet industry. With higher smartphone penetration and increased data consumption, there’s tremendous opportunity for the internet economy, he said.
“India has the right kind of skill sets to offer to customers and the value proposition is extremely powerful and sustainable over the next 15-20 years,” he said, adding that even though the sector is full of mid caps, growth in the coming decade is likely to turn these firms into leaders.
The wealth adviser listed manufacturing as another key area that will witness exponential growth. “Covid-19 has reset geopolitical equations globally,” he said. “The world is wary of China and in need of an alternative—where India can step in.”
The combination of low-cost labour, reduced tax rates, and the production-linked incentives make India an attractive option for companies, Murarka said.
However, he cautioned against investing impulsively in these fast-evolving spaces. “There are equal number of companies that will fail and succeed. Investors need to be selective and do their homework.”
Watch the interview here: