Frontline indices are going through a corrective phase, with the Nifty shedding around 350-odd points. While some investors could raise concern over it, market veteran Madhusudan Kela sees this time as a positive.
“There are plenty of opportunities which are there in the markets, both in midcaps and large-caps. Corrections like these give investors chance to capture the opportunity,” Kela told CNBC-TV18 in an interview. Such a correction, he said, was long overdue as there has not been one since Nifty tested levels of around 7,800.
Kela believes the Street is at an early stage of the bull market, but not a matured one. This (market) will have a long way to go in terms of rewarding
“Due to the vibrancy of the market, one is getting a variety of companies to buy,” he told the channel. In fact, he sees more acceptance of equities from retail investors as the market has gone up. He backs this up with a fact that net flows for November into mutual funds could be as high as Rs 25,000 crore.
But will these investors stay put even after the correction. “If there is a decent correction in the market, there are too many people waiting outside waiting to participate. You will now see all those people who felt left out coming in,” he told the channel.
Speaking on the impact of upcoming Gujarat elections, Kela said if the verdict goes either way a meaningful correction is unlikely.
Giving his views on stocks and sectors, Kela is looking at buying infrastructure, particularly ‘bear market survivors’. “There are firms which have had extremely challenging times and you can find them across caps,” he said, adding one has to do bottom up work as well.
Meanwhile, he is also looking at opportunities in the pharmaceutical space or select banks. “We are about 2-3 quarters away from all the bad news for banks. I don’t think the valuation and prices are discounting rosy pictures,” he told the channel.
In case of IT stocks, he said digital part of the business is set to grow and will be big in about two years. At that time, this growth could surprise the market. Overall, he would be buying select large-cap IT companies.