In an interview to CNBC-TV18, Rahul Singh of Ampersand Capital Investment Advisors LLP talked about how the house had a 'sector-agnostic' market approach and preferred 'bottom-up' stock picking.
The house, he said, was upbeat on financials but mainly the wealth management and asset reconstruction companies like Edelweiss and IIFL. These businesses are an inflection point, he said.
Singh was also positive on some of the road construction players that have orders ready for execution. He expected numbers for the coming quarters to reflect that. KNR Construction, Dilip Buildcon are some such companies.
From pure real estate perspective, one should look at the NCR region for the recovery there will be quicker, he said.
With regards to DLF, beyond the deal with Singapore’s sovereign wealth fund Pte, he said, the outlook seems to be a back-ended and long-drawn. He preferredto stay away.Below is the verbatim transcript of Rahul Singh’s interview to Ekta Batra and Prashant Nair on CNBC-TV18. Prashant: In your note, you are drawing parallels with the game of cricket and markets. Could you briefly tell us what that is about? A: It is just one way of looking at it. So, there is a lot of analogy we saw in the way the markets have behaved in the last three or four months post demonetisation and the way our Indian batting team had performed till the last test match about -- even an average player has been scoring a lot of runs and everyone has been scoring big runs and above average players have scored even bigger runs. So, we saw that there was a tendency in the market as well for companies with not a very established track record also being lapped by the markets and also obviously companies which are perceived high quality did even better and the valuations become little did even better and the valuations become little expensive. So, that is the kind of parallel we saw and nothing to indicate about what is going to happen in future, but there is definitely something which we saw as parallel and we thought it was interesting to just present it that way. Ekta: Just wanted your thoughts in terms of which sectors you are liking right now, where might you be building positions in the past one or two months especially post the Budget? A: We have a pretty sector agnostic approach and we try to find bottom-up picks even in sectors which are not doing well. So, for example, even in technology, we did favour Tech Mahindra and that is a stock which has outperformed all the other technology stocks. So, our effort is basically to look at stocks on a bottom-up basis and not really get bogged down by sectors too much. So, one of the segment of the financial services which we are quite bullish on is the wealth management and the asset reconstruction side. So, there we like Edelweiss and IIFL as two primary gainers from that tailwind which is there in wealth management specially and even in ARC and I think there is an inflection point coming in some of those businesses. Similarly in the construction side, I think there are a lot of these sectors or companies which have not really benefited from the fact that their order books have grown but their execution has not yet started and we have started seeing that happening in a lot of these companies. KNR Construction for example was one of the stocks we liked, but moving on forward from there, I think even companies like Dilip Buildcon and other large road construction companies are now beginning to execute their order books which is now going to show up in numbers starting this quarter and whole of next year. So, those are the couple of sectors or sub segments which we have focused on just to give you an idea. For the entire interview watch video
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