India has emerged as an oasis in the desert when one looks at what is happening in our neighbourhood and globally, Nilesh Shah, managing director at Kotak Mahindra Asset Management Company told CNBC-TV18 in an interview on May 13.
The veteran asset manager, however, acknowledged that domestic market conditions will be driven by what is happening in Eastern Europe given that the pendulum can swing either side in the Russia-Ukraine war.
“It is far better to remain humble, look at events as they are unfolding and then build your portfolio,” Shah said.
Shah said that valuations have largely become reasonable because of the ongoing correction in the stock market. Domestic benchmark indices have fallen more than 14 percent from their record highs hit in October 2021 due to fears of aggressive interest rate hikes, Russia-Ukraine war and surging global crude oil prices.
“We think this is time to invest in sectors where valuations are reasonable,” Shah said. The asset manager also said that in the current inflationary environment his fund house is investing in companies that have pricing power.
“We want to invest in companies that can push the higher prices to consumers without losing volumes,” Shah added.
Shah said that across equity funds, one-year returns for systematic investment plans have turned negative or are just mildly positive, which has had a bearing on sentiment. That said, Shah said that investors are still looking to use the correction to buy in the market.The veteran investor also said that investors are taking heart from the fact that March quarter earnings of Indian companies so far have been largely in-line or above expectations.
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