Madhu Kela, market veteran, discusses the economy, state of the midcap market and pharma companies' with CNBC-TV18's Anuj Singhal.

The pharma companies had a positive fourth-quarter performance where none of the sector companies reported a loss. Kela said the recent upmove in the pharma companies is more than just a short covering.

Though the pharma companies did not report losses, it faced high operation costs and had few issues with the Food and Drug Administration (USFDA) for approving the manufacturing and selling of the drugs.

Read the full story here: Market veteran Madhu Kela advises investors to make friendship with volatility in midcap space

Kela said this is because the research and the development expenses have been on the higher side for the pharma companies and said the valuation for these companies have been corrected. He is confident that the pharma firms' issues with the US drug regulator will be resolved in the coming months.

Kela recommends Divis Labs and maintains a positive stance on the stock. "There are a lot of opportunities in select pharma stocks," he said.

First Published:Jun 12, 2018 11:00 AM IST