Manish Gunwani, CIO-Equity Investments, Reliance Mutual Fund believes that though the financial conditions have improved generally, liquidity still remains to be an issue for some NBFCs.
“Even for NBFCs with good parentage and strong business models we are not down in terms of cos to funds to where we were 6-9 months back,” he said, adding that it is work in progress and that things are improving for the space.
Gunwani said from a medium to long-term perspective, there is a reasonable value in stocks in the midcap and smallcap space. “From a broad thesis from a three-year perspective, the largecap and midcap index now offer the same risk-return profile,” he said.
Gunwani is quite positive on both, global as well as domestic scenario. The emerging market currencies have started doing well from mid-December, said Gunwani, adding domestically, the financial conditions are improving.
With regards to auto space, he said there is an interesting interplay between structural and cyclical factors. The house is more inclined towards playing a rebound in the commercial vehicle cycle because stocks have fallen quite a bit and long-term growth for them should come back. Moreover, the threat of tech disruption is relatively low in that space, he said, adding that he is also looking at auto ancillary stocks where EV threat is relatively lower.