How to tweak your investment portfolio amid the expanded vaccination drive?

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Amid the uncertainty of lockdowns and anticipated delay in the economic recovery due to the rising Covid-19 infections, stock markets have been highly volatile. In the given scenario, investors are finding it difficult to access the direction that markets may take from here on. In the special edition of Market Masterclass on the  liberalisation of the vaccination drive, Avinash Gorakshakar, Director Research at ProfitMart Securities shares key insights on how investors should look at this fresh trigger. Edited excerpts:

Will expanding the vaccination drive help improve market sentiment? Opening up vaccination for 18+ is certainly positive even though it has come a bit late. The run rate for vaccination will improve substantially. Currently about 2% of the population is fully vaccinated. This would definitely be a sentiment driver for the markets.

Has the second wave and the vaccination drive altered your stock selection ? Pharma sector has clearly become a focus area. Companies which are into medical equipment manufacturing, hospital stocks and select vaccine plays can be looked at. I believe Dr Reddys, Auro Pharma and Cadila are likely to benefit and can be kept on radar. Vaccines are going to give them a big revenue boost. Profitability can spill over to FY23 also.

Markets are likely to pencil in incremental revenue growth for these companies. We can expect to see a lot of action in markets on these stocks. In the second leg, one can make some additions with respect to pathology companies like Thyrocare, Dr Lal Pathlabs etc. as they would get earnings boost. So, while the overall structure of the portfolios : could remain the same, one can look at some additions from this space.

Is it time to go all aggressive on the pharma space or should one be fairly selective? Chasing the stocks which have already run up too much, might not be wise. One must look at dips to accumulate this stocks keeping in mind the moderate to expensive valuations these stocks have

What is your take on insurance companies? Insurance stocks are not short-term trading bets. In the pecking order from a medium term perspective, one can look at HDFC Life and SBI Life as I believe a lot of wealth creation will take place here.

Watch the full interview here