Krishna Kumar Karwa, managing director of Emkay Global, on Monday, said that the financial sector continues to present a good investment opportunity.
“The space where we have the maximum safety and opportunity today could be in the financials. We have seen that the banks etc., have underperformed in the last 3-4 months, possibly the credit collection etc., in the last few months has been very good. So, credit costs should not be very high when the Q2 results come out and credit growth may also pick up when the valuations of most of the banks are reasonable. The two things which banks have to be careful about are credit cost and credit growth, if both things are taken properly then that is where the maximum returns could be made in the next 3-6 months,” Karwa said, in an interview to CNBC-TV18.
According to him, environmental, social, and corporate governance (ESG) concerns on select PSU companies have been overdone. “In some of the public sector undertaking (PSU) companies, the ESG concerns have been overdone and the market is willing to overlook the ESG concerns and respect the valuations and the opportunity in terms of the next 6-12 months. So that could be another space where you could possibly see some investment opportunity, be it in the oil and gas sector, coal sector or even in some of the PSU banks and defence companies,” Karwa said.
On aviation space, he said, “Barring an unforeseen COVID third wave, the sector should do well. However, what is required is more support from the government in terms of aviation fuel taxes, etc., if that comes into play then there is possibly scope for a few more airlines to set up shop and if they run efficiently then they can make money.”
For the entire interview, watch the video