Ambit Cap’s Pramod Gubbi says downside in largecaps possible; likes consumption names

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Even as the market is looking to inch back to its record high levels, the correction in broader markets — particularly in the mid and smallcap space — is on experts’ radar.

“While the index has broadly remained stable, there has been significant correction in mid and smallcaps. Perhaps largecap names could correct a bit before going up,” Pramod Gubbi of Ambit Capital told CNBC-TV18. From the perspective of entering the market, one could prefer some more downside from the current levels, he added.

For investors in the current market, he said that it would be prudent to have a systematic approach with investing rather than timing the market.

Speaking on sectors, he said that consumption theme has a structural trend in India. These could be in focus in the light of election year as well. With good monsoon, and policy support in terms of minimum support price (MSP), among others, he remains positive on consumption.

Gubbi summed up the interaction with a view on the MSCI capping India’s weightage issue. He said that active investors may not worry much about this, but for passive funds, especially ETFs, it will be a cause for concern. Any action could have negative impact on flows as well as valuations.