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May not have seen market bottom yet, but quality stocks available at reasonable valuations: Mahesh Patil

"There would be a significant slowdown in growth in the next few quarters, and a lot of the sectors will get impacted," Mahesh Patil of Aditya Birla Sun Life AMC said.

March 30, 2020 / 12:59 PM IST

A near 35-percent market correction over the last couple of weeks has provided an opportunity to buy good blue-chip and quality names at reasonable valuations, Mahesh Patil, Co-Chief Investment Officer, Aditya Birla Sun Life AMC told CNBC-TV18 in an interview. However, he pointed out that we may not have seen the bottom in the market yet.

The coronavirus outbreak, he said, will cause significant growth slowdown over the next few quarters with a lot of sectors getting impacted.

"It will have an impact across sectors whether it is consumption, whether it is the services sector, infrastructure and to that extent one would have to look at companies or sectors, which would get impacted temporarily and which would be able to bounce back once things normalize," he said, adding that there could be some medium-term impact in a few sectors because the recovery from the current slowdown would be slow and gradual.

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"There is some rejig in the portfolio, which we are doing at this point in time,” he said. “Stocks, which we earlier wanted to buy but were very expensive are now coming in at price points which are comfortable from our perspective and we are trying to rejig the portfolio in some of these names and overall trying to keep some liquidity in the portfolio because I don’t think we have seen the bottom in the market but the market will provide opportunities where it will probably again retest the earlier lows,” said Patil in an interview with CNBC-TV18.

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In terms of investor behavior, he further mentioned, “Interestingly, in this month of March, we have seen that inflows have been good compared to the last few months, you will see record flows in this month, that is what the initial indication is. Investors are acting in a much more matured way. They are seeing that the market correction is offering a good opportunity to make some larger equity allocation because over a medium to long-term one should make good returns from these levels.”

“Although there have been some redemptions, overall on a net basis, it is a fairly decent inflow. The market remains weak for the same period of time than the initial bout of money which has come in, that might slow down and the next month will be crucial to see how the market stabilizes,” he said.

Source: CNBC-TV18

first published: Mar 30, 2020 12:52 pm