Pratik Gupta, CEO and Co-Head, Institutional Equities, Kotak Securities believes the markets are looking beyond lockdowns in India.
“There may be some near-term nervousness but most investors will look past the lockdowns. Therefore, if you see any kind of a correction, that would be a buying opportunity,” he said in an interview with CNBC-TV18.
“If you look beyond the next one-two months and take a six-twelve month sort of a view then we still like private banks, the IT companies and the metal stocks. So no real change in our overall stance as such,” he added.
His preference is focusing more on the domestic cyclicals than the fast moving consumer goods (FMCG) space. “Structurally we prefer more the domestic cyclicals whether it is banks, metals or consumer discretionary. Even on FMCG one has to be little worried about the impact of raw material prices, how much of that will get absorbed and will there be any potentially negative margins surprises. However, some of it has already been priced in. structurally we prefer more of the economically sensitive, more of the cyclical plays than FMCG from a slightly longer-term perspective,” he stated.
In terms of Indian markets, he pointed out, “One big change which has happened is that the US bond yields have cooled off. That is helping the sentiment a little bit for emerging markets (EMs) in general. Within EMs, China is cooling off and until this week, India was chugging along, we were doing well, the earnings growth outlook was looking pretty positive. We are still seeing very strong interest in India right now, that hasn’t changed.”
India has still seen as a relatively better play compared to Brazil, Turkey or some of the other countries, he pointed out.
“We have been quite positive on the IT space. From last year itself we consistently held above consensus earnings estimates. We have raised earnings about a month or two back. So we have been quite ahead of the curve and we think there is scope for more earnings upgrades given the strength of what is happening in the IT services space, the demand outlook is very strong,” he said.
For full interview, watch the video
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