The rally in the Indian stock market is likely to broaden over the next three-six months as there are still some sectors that continue to be impacted by the COVID-19 crisis, said S Krishna Kumar, CIO-Equity, Sundaram Mutual Fund.
"We expect a little bit of a catch-up on the stocks," said Kumar in an interview with CNBC-TV18.
“There are still those sectors that are impacted by the fear of COVID-19. So we believe the next three-six months - we should see further broadening of the rally as growth normalises across all sectors,” he added.
When asked about the pick of the pack in the consumption sector, he replied, “If one has a bit of a longer-term perspective - a lot of these leveraged names right from hospitality, hotels, holiday homes, etc., which are now suffering... Also, some of the names in the multiplex sectors have been shut down including the retail malls across the metros – a lot of these companies will start to get good interest from the investors at large. More importantly, we should look at the consumer discretionary part.”
On fast-moving consumer goods (FMCG) names, Kumar said, “I think the trade balance will shift from investors from FMCG being 'overweight' to moving to 'overweight' position in consumer discretionary.”
In terms of specialty chemicals, he further mentioned, “We find specialty chemicals as a niche area which could become larger in the mainstream over a period of time." "So, in our portfolio, we would find that we always pair it through Navin Fluorine, Aarti Industries – we have tried to take our picks there.”