DAILY VOICE | Create ‘Bharat-centric’ portfolio with FMCG, infra & healthcare: Ankit Agarwal of Alankit Ltd

Utilities and packaging should do okay because a number of companies in the space cater to essential needs while multiplex and other real estate plays will take time to recover, says Agarwal.

August 28, 2020 / 07:52 AM IST

In the present circumstances, utilities and packaging businesses should do okay because a number of companies in the space cater to essential needs while multiplex and other real estate plays will take time to recover unless they get special stimuli, Ankit AgarwalManaging Director at Alankit Ltd, says in an interview to Moneycontrol’s Kshitij Anand.

Edited excerpts:

Q) Global diversification is the theme that has picked up momentum in the week gone by, with three brokerage firms announcing that their platforms were streamlined to invest in US markets. What is the kind of percentage one should allocate globally?

A) This will typically depend on the investor's risk profile and investment goals—so one should always consult a financial adviser before making portfolio-allocation decisions. However, in general, we have seen investors allocate an average 15-20 percent of their portfolio to global markets.

Q) What are the risks when it comes to global diversification?

A) The risks associated with any equity market are also associated with the global markets—both systemic and non-systemic risks. For Indian investors, the INR:USD rate is an additional source of risk.

Q) A Morgan Stanley report has said small & midcaps are on the cusp of rerating. What is working in favour of the broader markets?

A) Valuations were suppressed because companies were finding it hard to cope with rapid policy changes (such as those made in GST and due to demonetisation) but with time, companies are finally able to react efficiently.

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Also, the recent policy decisions with respect to economic stimulus during COVID-19 are also supposed to have a positive impact on the market over the next few months.

Q) What is your view on packaging and multiplex space? It has been buzzing for some time, Utilities, too, are gaining momentum, especially after Prime Minister Narendra Modi’s Independence Day address.

A) Utilities and packaging should do okay because a number of companies in that space cater to the essential needs of customers. Multiplex and other real estate plays will take time to recover unless they get special stimuli.

Q) Most policies announced by the government are focused on the rural theme. Which are the stocks that can make a ‘Bharat-centric’ portfolio?

A) FMCG, infrastructure, healthcare (are the stocks) with which one can create a ‘Bharat-centric’ portfolio.

Q) We are trading at high valuations. In the US, too, markets have touched record highs. Do you think we have touched an intermediate top? What is your call on equities for the short term?

A) At least in the US, there is still room if one looks at specific stocks and not just the whole market in its entirety. Markets have generally been very unpredictable, so it's hard to bet with surety.

Some of the companies (such as tech, pharma, energy) which led the US boom in the last few months seem to have more headroom as they are effectively able to cater to the changing lifestyles of the end-consumers.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Kshitij Anand is the Editor Markets at Moneycontrol.

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