Synopsis: Brokerages highlight healthcare and real estate as key sectors to track. Policy-led healthcare spending favours hospitals and select pharma names, while budget support for GCCs and data centres strengthens the long-term outlook for commercial real estate, according to CLSA and ICICI Direct.
Broking houses are turning selective amid evolving policy signals, identifying healthcare and real estate as two sectors worth keeping on the radar. While CLSA sees structural, long-term drivers emerging from government policy in both segments, ICICI Direct highlights stock-specific opportunities in pharmaceuticals with strong earnings visibility. Together, these views point to theme-based investing rather than short-term rerating trades.
CLSA on Healthcare
The healthcare theme is policy-driven and not a short-term pharmaceuticals rerating, as the government’s FY27 healthcare budget is expected to increase by 33% YoY, but the bias is more towards medical tourism, biopharma ecosystems, human capital, and healthcare infrastructure. The reduction in customs duties is a positive for MNC pharma companies, as it will help reduce their costs, but it will have limited upside for Indian generic companies. Consequently, large hospital chains are identified as the key beneficiaries, as their capex, infrastructure, and patient volumes will increase.
ICICI Direct on these two stocks
Additionally, ICICI Direct has a positive outlook on both Sun Pharmaceutical Industries and Ajanta Pharma, based on their strong fundamentals, earnings visibility and the role they play in the pharma segment. For Sun Pharma, the broker points out the resilience of its speciality portfolio, domestic formulations business, and strong cash flows, which mitigate risks of volatility in the US generics business, justifying a target price of Rs 1,910 (with a potential upside of 13%).
For Ajanta Pharma, ICICI Direct is positive on its branded generics business model, debt-free balance sheet, and high return ratios, with consistent performance in India and emerging markets justifying the target price of Rs 3,270 (with a potential upside of 18%).
CLSA on Realty sector
Global broking firm CLSA has taken a positive stance on the real estate sector, emphasising that the recent budget announcements have given the sector strong structural support for the long term. By identifying DLF and Embassy REIT as its top picks, CLSA is clearly optimistic about developers and vehicles that are in sync with the changing Indian commercial real estate landscape.
One of the major positives, in CLSA’s opinion, is the enhanced policy clarity on taxes and compliance for Global Capability Centres (GCCs), in addition to the tax holiday being extended until 2047 for foreign companies establishing data centres. This move is expected to give a substantial boost to demand for quality office space and specialised infrastructure, which will benefit developers with robust annuity asset portfolios and those with the ability to unlock land for data centre development.
Although the broking firm recognises that curbs on the use of MAT credits may turn out to be a mid-term earnings drag, it considers this to be a manageable risk. CLSA is of the view that the magnitude and sustainability of the opportunities that are likely to emerge from the GCC growth and data centre investments would ultimately outweigh the mentioned negatives, and thus the overall policy trend would be highly positive for the real estate industry.
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