Less stress from non-performing assets (NPAs) and banks recovering at a faster pace is encouraging, said Deven Choksey, MD, KR Choksey Investment Managers.
“There is less amount of stress from the NPA side. Banks are recovering at a faster pace which is very encouraging news as far as the business is concerned,” Choksey said in an interview with CNBC-TV18.
Choksey said that though valuations are higher, additional fund flow into the market is positive for the likes of ICICI Bank and Kotak Mahindra Bank.
“At the same time, credit growth is picking up and many of the banks, particularly corporate banks and private sector banks, are seeking prospects of monetizing some of their verticals. That is where it is demanding portfolio action into these stocks. I would agree that to an extent, these stocks have run up a little bit ahead of time as far as their valuations are concerned. But as I always believe that when an additional amount of fund flows gets into the market, they look around for the size of the companies in which they could make investment and that is where the likes of ICICI Bank, Kotak are finding favour in the portfolio of fund managers,” he said.
On auto companies, Choksey said that higher demand and economic recovery could benefit the likes of Ashok Leyland and Tata Motors.
“I would like to consider the likes of Ashok Leyland, Tata Motors into the portfolio given the fact that higher amount of demand is expected to get generated, the economy is getting back to normal, and at the same time, any time scrappage policy-related issues could possibly push the demand for the commercial vehicles. So, I would continue to keep the focus on the likes of Ashok Leyland and Tata Motors. They could possibly be smarter performers comparatively in this particular space,” he said.
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