Rahul Singh, chief investment officer (CIO)-equities at Tata Mutual Fund, on Wednesday, said that a part of this coal shortage issue is seasonal in nature.
“Part of it is seasonal (coal shortage issue). It happens every year from September-October. This time it is accentuated because we have had a sharp recovery in demand in the first half; obviously, of a low base but still the electricity demand has grown in the first half and there is an expectation of the electricity demand growth is continuing to be high over the next 2-3 months. So that is leading to so-called coal crisis,” Singh said in an interview to CNBC-TV18.
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On investment opportunities, Singh believes that there are some pockets of cyclical where recoveries of the sector are still under-appreciated.
"In autos, we have seen a bit of a rally but banks are still lagging,” he elaborated.
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According to the Tata MF CIO, IT looks good in the medium term.
"The momentum in terms of business outlook, deal wins and deal activity which is there points to what we have been hearing from all the companies. So there is nothing new there and nothing changes,” said Singh.
A consolidation though can't be ruled out in the sector.
“Valuations have run-up a bit and midcaps are trading at higher valuations than large-caps and that traditionally is a point where sector takes a breather," he explained.
Singh believes that the margin pressures on IT companies because of attrition will get sorted out over 6-9 months.
For the entire interview, watch the video