Prakash Agarwal of Axis Capital on Monday said COVID-related drugs likely to grow in the high double digits.

In a note that was published, Agarwal has identified opportunities as far as the domestic pharma sector is concerned.

“COVID related drugs are going to be a flavour and they will grow high double-digit, but from phase one to phase three if there is a period of stability then the electives will increase because somebody is waiting for surgeries to happen, so there will be pent up demand. Therefore, we expect that the overall market should grow better, but COVID lead drugs will do much better than the market,” Agarwal told CNBC-TV18.

He further said that Axis Capital has a buy call on Eris Lifesciences, Torrent Pharmaceuticals and Alkem Laboratories. “They have the highest share of domestic formulations and the volume growth is coming back and these will be having direct operating leverage of higher growth because the costs are constant. So these three companies, which has not performed in the last 6 months are expected to outperform going forward,” said Agarwal

On the published note, he said, “We have highlighted in the report that growth is bouncing back and if you adjust April ’19-20 numbers, the growth of ’21 suggests that there is a double-digit growth which is upwards of 15 percent. This is not only a function of the low base but also increase the use of drugs both for indirect and direct COVID treatment.”

For the entire interview, watch the video

(Edited by : Bivekananda Biswas)