We are underweight on US based generics, said Harish Krishnan, Kotak Mutual Fund.
Talking about financials, he said, “We have stocks across the spectrum in financial services. Bulk of our exposure is in retail oriented private sector franchises and we also have exposure to corporate bank. Corporate bank is in a space wherein over the course of the last two or three quarters it has been extremely brutal in terms of the recognition of losses that they are taking with respect to the enhanced provisioning that they have to make because of new NPA formation.”
He further added, “Our sense is that, that could continue well for another quarter or two as we move into it. Few large cases need to get through in terms of NCLT resolution and we will get a sense as to how the next cycle is coming through. This pain is essentially part of the previous lending cycle and we are possibly closer towards the end of that cycle. So, we need to really start positioning as to how the next wave and the next cycle starts progressing and that is why we have some of the leading corporate franchises in our portfolio.”