Rajat Rajgarhia, managing director - Institutional Equities, Motilal Oswal Securities, in an interview with CNBC-TV18 on Friday, said that financials led by private banks, IT, utility and consumption are the key themes to invest in currently.
On IT, he said, "Given the kind of continued safety we are seeing wherein companies are doing better allocation of their cash, the stocks could give slightly lower returns but it would still be a 10-15 percent returns."
"Utility would benefit because of the volatility in earnings is lower for them and they would also benefit from lower interest rates. With regards to consumption, the medium to longer-term story is still strong," added Rajgarhia.
However, he said that pharma stocks will not get the premium multiples they used to get a few years back.
“Markets are right now trying to come out of all the pressures that we have been hearing over the last couple of weeks. There are event after events that market is looking forward to — first was election, which was in favour, now next is the Budget, but the underlying narrative of slowing economy and the earnings continuing to trend down is not going well with the overall market right now, “he said, adding that there is a need for some stability in those trends for the broader market to bottom out.
With regards to auto space, he said, "Till the time we do not get clarity on where the underlying business environment bottoms out, I don’t think stocks will bottom out much in advance of that."