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market | IST

Investors should look at companies from 3-5 year perspective, says Sanjay Dutt of Quantum Securities

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According to Sanjay Dutt, Director at Quantum Securities the underlying problems in the corporate sector have affected the stock prices in the year 2019.

The market has been trading in range since he beginning of 2019. Most stocks have remained flat-to negative in the year. According to Sanjay Dutt, Director at Quantum Securities the underlying problems in the corporate sector have affected the stock prices in the year 2019. "80-90 percent of the entire corporate sector is a complete mess," said Dutt in an interview with CNBC-TV18.
Dutt suggests that investors should look at companies from 3-5 year perspective that have clear balance sheets, and the volatility in the Nifty50 should not worry long-term investors.  Earnings and flows are two things that would be very critical for the market, he added.
He also said that there is a lot of value across the market and not just in FMCG or topnotch companies. "A company like Voltas is a good bet as it has repositioned itself and eaten up the market share of MNC companies in the air conditioning market. Another example of a good debt free, loss free company is Century Enka," he said.
With regards to NBFCs, he said they will be unlikely to replicate the hefty returns given in the past few years and will never get loft valuations like 5 times price to book going forward.
Talking about the various issues that the market is currently facing like problems with promoters, NBFCs etc, he said we have to learn from these things but do not forget the cardinal rule of investing that you should know to cut your losses.
For auto sector, he said the price correction is not yet excessive but has reached a realistic level. Ashok Leyland, according to Dutt, is a better bet than Tata Motors. "However, while taking position in this pace one should keep in mind that the entire space is a going through a structural change and so look for companies that are positioned for the new change," he cautions.
Auto ancillaries stocks could get harder hit as OEMs will try to squeeze their margins, he said, adding that he would not venture into that part of the space.