Comparing India’s CDMO sector to the 90s IT boom, Vikas Khemani highlights the potential for exponential earnings growth despite initial high valuations. Using the example of Neuland, he demonstrates how rapid earnings growth can rationalize seemingly high P/E ratios. While some CDMO stocks may seem pricey based on current earnings, Khemani emphasizes the importance of evaluating their future potential. Looking beyond the present metrics, he urges investors to consider the possibilities for significant growth and value creation in the evolving CDMO landscape.
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