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Focus on better quality cos; include IT in portfolio: Aditya Birla Sun Life AMC

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Mahesh Patil, chief investment officer (CIO) at Aditya Birla Sun Life Asset Management Company (AMC), on Tuesday, said that the focus appears to be back on better quality companies.

Mahesh Patil, chief investment officer (CIO) at Aditya Birla Sun Life Asset Management Company (AMC), on Tuesday, said that the focus appears to be back on better quality companies.
In an interview to CNBC-TV18, he said, “The focus is coming back on larger companies. Companies which have got much more stability, sustainable, those stocks are likely to do well. So overall, the market looks to be fairly priced over here. I do not see any big upside from a very near-term perspective and it will be driven, to a large extent, by individual companies where the earnings outlook in the next couple of quarters is going to be good.”
On IT, Patil believes that valuations in the IT sector are looking good, even though they are on the higher side. He said, “There was a slight disappointment in some of the large IT names in terms of their topline growth and also on the margin front, but by and large, the visibility on the sector, over the next couple of years, in terms of growth looks fairly strong, the pipeline is good. So, this sector should continue to be steady and I do not see any major volatility in the earnings in this sector.”
He further said, “IT stocks should be part of your portfolio. It will give stability.”
According to him, banks with corporate exposure look good as the nonperforming asset (NPA) cycle may be coming to an end. “Corporate banks are looking fairly good at this point in time; while the credit growth is still very poor on the corporate side but the corporate NPA cycle is behind us,” said Patil.
He further said that one needs to be very selective in the pharma space and that he prefers domestic pharma stocks which deliver steady growth.
For the entire interview, watch the video
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