If you are making the basic assumption that the COVID-19 impact will be broadly limited to the first half of fiscal year 2020-21 and the consumption will start normalising by end of the current financial year then the market is fairly valued, said Sanjeev Prasad, MD, co-head of Kotak Institutional Equities

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Nobody knows what the numbers could be because you don’t know the extent of the lockdown and the related slowdown, he told CNBC-TV18.

"So, FY21 numbers will get impacted significantly as far as both gross domestic product (GDP) and earnings numbers are concerned,” he added.

"I think FY22 numbers should not be that much corrected by whatever is happening currently. If that is the base investment scenario then I would assume that stocks are factoring in effectively much lower numbers or earnings numbers now which should not be the case."

"I would assume the world will get back to its feet over the next few months, people will go back to consuming over the next few months when the economic repair takes place. So, in that context many of the stocks are relatively undervalued,” said Prasad.

“You cannot put all your money in one sector and pharmaceuticals is not that big a sector. Many of the stocks will start looking reasonably valued. Marketcap of the sector is not enough to take some sort of a major leadership and ride the entire market."

"There are far bigger sectors which need to perform at the same time for the market to perform. However, pharmaceuticals sector was probably not getting any attention two months back, people will become a lot more careful about health."