thanksinvestor

I read about something like pharma stocks are better picks in current situation because they are defensive and cannot hit by recession. This may be correct but I am not an expert of pharma industry and the industry has some of its internal problem.In current situation most of the well established pharma companies are trading in the PE of range 30-60 like FMCG companies but with a far greater DEGREE OF  UNCERTAINTY . There are 2 approach of anchoring the valuation: Balance sheet Approach P&L approach Balance Sheet Approach : This is helpful for companies driven by mainly commodities not by consumers.   P&L approach The P&L approach is suitable for Asset light and dependent on consumer spending. These companies generally have strong brand high ROE and no debt. You will find them in FMCG segment and in pharmaceuticals.Pharma is a complex business and difficult to give a fair value for its shares . Why is it difficult to analyz...