An exclusive analysis of Carnelian Asset Management’s investment playbook amid global uncertainty
The GLP-1 Gold Rush: Why Indian Pharma is the Place to Be
When markets tremble at the resurgence of West Asia tensions, Vikas Khemani sees opportunity. In a wide-ranging interview with NDTV Profit, the founder and CIO of Carnelian Asset Management laid out why he’s doubling down on Indian pharmaceuticals—specifically the explosive GLP-1 agonist market that’s reshaping global healthcare.
“This is a fast, large opportunity,” Khemani stated emphatically. “All pharma companies are going to tap into this. Of course, everybody may not be successful, but the ones with the right capability would be successful.”
The GLP-1 market—driven by weight-loss and diabetes drugs like Ozempic, Wegovy, and Mounjaro—has created a supply vacuum that Indian companies are racing to fill. But Khemani identifies a critical secondary opportunity that most investors are overlooking: the global insulin shortage.
“There’s also a shortage in insulin capacity globally because a lot of innovators have migrated their capacities towards GLP drugs,” he explained. This capacity shift has left traditional insulin markets underserved, creating a significant opening for Indian biologics players. Biocon, which Khemani specifically highlighted, stands as the largest beneficiary in this space.
The “End-to-End” Differentiator: Why Not All GLP-1 Plays Are Created Equal
When asked what separates the winners from the losers in this crowded space, Khemani’s answer was unequivocal: vertical integration and domain DNA.
“Companies which have end-to-end capability and also DNA of being in this space would stand to benefit, especially when it comes to regulated markets and overseas markets,” he said.
This directly echoes recent comments from Kiran Mazumdar-Shaw of Biocon, who emphasized that in-house manufacturing capabilities—from Key Starting Materials (KSMs) to finished formulations—provide a decisive competitive edge over companies dependent on imported intermediates.
Khemani’s investment filter is clear:
- Winners: Companies controlling their destiny from KSM → API → Finished Product
- At Risk: Players relying on imported entry-level materials, vulnerable to supply chain shocks and margin compression
“Even in domestic markets, people who have control on their own destiny from a KSM perspective to end product would tend to benefit and tend to have advantage,” he added.
Macro Storms, Micro Opportunities: The Carnelian Playbook
With global markets whipsawing between tariff fears, West Asia conflict, and crude volatility, Khemani remains structurally bullish on India—but with a crucial caveat.
“Last one and a half years has been very volatile from a news flow perspective—right from tariff operations for a long period of time, then we had West Asia war, and today also continues to remain so,” he acknowledged. “But the good news is that India is handling this period well. We’ve not had deep impact on our economic growth or our corporate earnings.”
Khemani draws a compelling parallel to the Ukraine war in 2022: “A 3-4 month period was significantly uncertain in terms of macro news, oil price, supply chain disruption. As those issues settled down, the market started climbing up, and 2023 ended up being a very good year.”
His prescription for navigating uncertainty? “Short-term uncertainty happens—actually, we try to buy long-term themes. Those are the times when good opportunities are available at good prices.”
The $1.5 Trillion Manufacturing Inflection Point
Beyond pharma, Khemani sees something bigger unfolding: a structural, decade-long manufacturing renaissance in India that he believes could be the defining investment theme of the 2020s.
Two “silver linings” from the last 18 months of crisis have fundamentally altered India’s competitive position:
1. The FTA Windfall
“India, because of the tariff situation, ended up signing new FTAs with the EU and many other countries, which collectively put together a $1.5 trillion market,” Khemani revealed. “That market has suddenly become accessible with advantageous terms.”
2. The Currency Advantage
“India’s currency depreciation with a lot of other trading partners is between 12-15%,” he noted. This has given Indian exporters a significant cost competitiveness boost at precisely the moment new markets are opening.
These twin tailwinds, Khemani argues, will accelerate India’s push to raise manufacturing GDP from 15-16% to 20-25%—a transformation he calls “a very big decadal trend.”
The Manufacturing Opportunity Map spans:
- Pharma & CDMO (Contract Development & Manufacturing Organizations)
- Auto & Auto Components
- Capital Goods
- Defense & Aerospace
- Specialty Chemicals
“This inflection point in the last one and a half years—and this setup which is there which can lead to an inflection point—is very interesting,” Khemani said. “If you understand that space, then these are the times to get your investment right in those interesting spaces in companies which give you multi-baggers of the future.”
The Bottom Line: Conviction in Chaos
Khemani’s core message is one of disciplined optimism. While acknowledging that “one can’t say” whether geopolitical escalation will persist, his framework is clear:
“Themes don’t change in investing. Manufacturing continues to remain a very strong theme across various chains.”
For investors paralyzed by headline risk, his advice is characteristically direct: Think medium-to-long term. Use volatility to accumulate quality. Focus on companies with durable competitive advantages in structurally growing spaces.
“India is in a reasonably decent space,” he concluded. “Bullish in the long term.”
Key Takeaways for Investors
| Theme | Khemani’s View | Actionable Insight |
|---|---|---|
| GLP-1/Biologics | Large, fast-growing market; not all will win | Favor end-to-end players with regulated market experience |
| Insulin | Global capacity shortage due to GLP-1 shift | Biocon is largest Indian beneficiary |
| Manufacturing | Decadal inflection point; $1.5T market access | Focus on pharma CDMO, auto, capital goods, defense, specialty chemicals |
| Market Strategy | Short-term noise creates long-term entry points | Buy quality themes during uncertainty; don’t chase momentum |
| India Macro | Resilient despite global headwinds | Corporate earnings intact; structural growth story intact |
Vikas Khemani is the Founder and CIO of Carnelian Asset Management and Advisor, an India-focused investment management firm.
Disclaimer: This article is based on publicly available interview transcripts and represents the author’s interpretation of Vikas Khemani’s comments. It does not constitute investment advice. Readers should conduct their own due diligence before making investment decisions.