Moneycontrol PRO
UPCOMING EVENT:Moneycontrol Pro & Espresso (A Sharekhan Company) in association with Intrazon 2.0 bring to you India’s Largest Retail Intraday Traders Online Conference. Learn 12 Amazing Strategies from 12 Intraday Traders @ Rs. 600/-. Register Now!

Daily Voice | Harish Krishnan of Kotak AMC overweight on 4 themes for portfolio allocation

Corporate India earnings are shaping well, and we sense a medium-term recovery of earnings cycle and investment cycle as balance sheets of India Inc are in a good shape in post-covid environment, he said

November 26, 2021 / 08:42 AM IST

Harish Krishnan, Fund Manager – Equity at Kotak Mahindra Asset Management Company says events like state elections, global interest rate trajectories and growth impulse slowing down from China may impact markets in the near term.

Krishnan has more than a decade of experience in equity research and fund management.

Keeping long-term view, Kotak AMC is overweight on four themes - financialisation of savings, turning of investment cycle, revenge consumption and global value chains.

Edited excerpts:

Q: You think RBI would hint at a rate hike in its December policy meeting given the rising expectations of a rate hike in the US?

Close

Central banks have multiple tools – rates, liquidity and other parameters nudging banks to lend, etc. While central banks across the world last year were unanimous in their support to both liquidity and lower interest rates, over the last 6-9 months, the global central banks are diverging in their policy responses on liquidity and rates.

RBI also has been draining liquidity in past few policy meetings, and while inflation has been strong in the recent month, globally and India, we think RBI may want to continue to support the growth objective of the economy.

Q: What is your broad expectations for Q2FY22 GDP, scheduled to be announced at the end of the current month?

Also readTega Industries sets IPO price band at Rs 443-453 per share, to raise Rs 619.22 crore

Recent high frequency indicators (fuel consumption, power, GST, mobility data), etc. are all suggestive of strong normalisation of economy, bouncing from pre-Covid levels. While private consumption indicators are strong, government consumption expenditure tends to be volatile and that may have a bearing on headline GDP levels. Notwithstanding headline print, we think overall economy is trending well.

Q: What are the challenges for Indian equities? As a result do you expect consolidation to continue in the next six months?

Corporate India earnings are shaping well and we sense a medium-term recovery of earnings cycle and investment cycle as balance sheets of India Inc. are in a good shape in post-covid environment. While fundamentals are encouraging, we have seen strong equity performance in last 18 months.

Also readUnicorn Club | Upstox's valuation to soar to $3-3.5 billion with new funding round led by Tiger Global

Given this, valuations are rich, both in absolute terms as well as relative to other emerging markets. Along with this, IPO/QIP have brought in significant supply, which the markets will take time to digest. Besides this, events like state elections, interest rate trajectories globally, growth impulse slowing down from China may also impact markets in near-term.

Q: What are the key themes that one should consider for a portfolio now with one year view (by 2022)?

We have longer-term orientation in our portfolio construct. With this caveat, we are overweight on the following themes:

Also readWhat recent tariff hikes mean for Bharti Airtel, Vodafone Idea

a) Financialisation of savings – we think top 10-15 percent savings pool has improved and this will be channelized to various products like insurance, card, gold, property, etc.

b) Investment cycle turning – private capex and real estate are turning, and we believe industrials, B2B consumables like gas, telecom, auto ancillaries, etc. are getting funds

c) Revenge consumption – with services opening up, we think consumers will spend on various categories like retailing, eating out, travel, etc.

d) Global value chains – global corporate and consumers are in better shape post covid. With global demand being good, many companies look to change businesses using digital transformation, INR has depreciated by 15-17 percent against various Asian peers like Chinese Yuan etc (pre-Covid to now) as well as PLI (production-linked incentive) etc, we think companies catering to global chains are likely to do well.

Click Here To Know All IPO Related News

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Sunil Shankar Matkar
first published: Nov 26, 2021 08:42 am

stay updated

Get Daily News on your Browser
Sections
ISO 27001 - BSI Assurance Mark