Growth not hurt; IT still defensive bet, says Investec Cap head

IT stocks were down this morning on the back of Donald Trump commenting that he will not allow Americans to be replaced by foreign workers. Demonetisation back home is a distress for many sectors. Mukul Kochhar of Investec Capital says that Demonetisation & Trump victory are the two factors playing out in markets.Speaking to CNBC-TV18, he said the current government has not lost popularity due to the cash clean-up drive. He believes that economic growth is not damaged. He added that IT is still a defensive bet for institutional investors.At shareholders' meet today Cyrus Mistry was removed as Director Of Tata Industries.For the Tata tussle Kochhar said, it is important to keep what's happening at the corporate level away from stocks. He betted on Voltas and said opportunity is still in the domestic oriented stocks. Below is the verbatim transcript of Mukul Kochhar’s interview to Prashant Nair & Ekta Batra on CNBC-TV18.Ekta: There is going to be a lot of news flow coming in on Tata stocks, have you reduced positions if in case you do have any, are you increasing positions how are you approaching all of it?A: You have to separate all the news that is happening at the corporate level from the stocks. In fact one of the Tata stocks which is Voltas is one of our top picks right now. So, the business is extremely good, it is in very attractive segment. Valuations are good post the corrections, post demonetisation so you got to separate the operating businesses a little bit from what is happening at the boardroom level. Stocks till then remain attractive, in fact these kind of corrections are buying opportunities, so taking look at the valuations one is not too concerned about what is happening really at the boardroom level.Prashant: You were running us through the impact on markets and where you see opportunities post this demonetisation?A: The opportunity according to me is still in the domestic oriented stocks so it is based on the thesis that the current government or the politics of the nation is not destabilised because of the events that has happened over the last one month. The base case whatever is emerging looks like the governments hand has been strengthened not weakened. The opposition seems to be in slight disarray. They haven’t really got their act together. So, that sort of situation is positive for longer term may be earnings two years or three years and beyond. In this case growth stocks become attractive post the correction, so story pretty much remains the same only thing is you are getting some of these stocks 15 percent lower versus what they were trading prior to November 8th.So, one is still attracted to discretionary consumption stories like Voltas, Maruti Suzuki. Private Banks will have a little bit of a breather in terms of earnings over the next two or three quarters, but the theme remains the same. Some of the retail oriented NBFCs as well they have corrected and one would be picking out some of those. So, stock picking if you look at it, if year two and three haven’t really been sort of diminished by what has happened one should treat this as an opportunity to pick up some of the domestic oriented stocks.