The credit cycle in banks is currently strong, but it is expected to moderate over time. Banks with strong liability franchises are predicted to remain profitable. There are also opportunities for shifts between banks, with large banks like HDFC and Kotak having not performed as well as other banks in recent times. However, it is more important to be selective with investments rather than making overall sectoral calls. The pharma sector is still early in its momentum, with the API and CRAM space having strong potential for returns over the next few years.
