Go for these 2 low-debt realty stocks: Shenoy

We should expect pharma companies to face some kind of US FDA action after the pandemic recedes, says Deepak Shenoy, Founder, Capital MindOn real estateWe have seen a recovery in the real estate space. Till March, recovery has been quite strong. In April, with the second ,wave a lot of uncertainty is probably going to be cropping in so I would want to wait one more quarter to see the sales continue. Of course, construction continues but new bookings would have been hit. As we come out of the local lockdowns, we want to see demand continuing to increase. In the west, we have seen a resurgence of real estate demand in a lot of urban areas. So, it is in general a positive but I would say go for players which have relatively lower debt. Oberoi Realty is one of them and so is DLF. DLF has actually cut down debt quite substantially. So the fundamentals might start working next quarter onwards but I will take one more quarter to assess and then take my step forward. On Lupin getting warning letter from USFDA for its Somerset facilityAs the US recovers, they will be able to visit places as well soon enough and we should expect some kind of FDA action after the pandemic recedes. We also expect action from some of the European regulators to kick in and undoubtedly they have not been active in the last one-one and a half years which is surprising and some of these things may be ordinary. Some of the things may be more serious but we are going to see a lot more of these FDA action. Pharma stocks have had a good run so far and insofar as FDA is concerned, they are going to see some negative surprises initially. How they react to that is going to determine how the stock does in the future as well. Would you want to go light on some of the pharma names?We have to see what the FDA is actually asking for. Sometimes it is relatively ordinary and the management and their call will actually tell you whether this thing can be sorted in a few months or is this something that they have to do a lot more work for higher external consultants and based on that, you might decide on the outlook. So let us wait for those pieces of news to come in because pharma in general has a good scope. I do not see the reason why one should get out just because the FDA is getting active now. One has to take it on a case-by-case basis. I do not think this is a case for selling Lupin because in this particular case, one has to hear from the management.
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