Vinit Sambre, director of equities at DSP Investment Managers, believes the market is better equipped to handle COVID if a third wave arrives this time. He also believes that any correction in the Indian stock market will be healthy. He mentioned that he likes the discretionary space of the consumer, real estate and cars. He is also extremely optimistic about banks.
He said: “The good thing about the virus is that history has been played the last two times and this time, even if there is a risk of a third wave, probably the economic impact of the virus may not be as much as it was before.”
The market correction seems fine from a long-term perspective because there has been a massive rally for the last 20 months or so. To some extent, this fix takes away some of the exuberance that had been created.
“If further corrected, it would make sense to search for some names, particularly in some segments,” he said.
He sees visible long-term growth opportunities available in different categories, such as consumer discretionary.
“It had gotten a bit more expensive. Therefore, the momentum would continue if we take into account the time horizon of the next four or five years. Therefore, the stock correction is a good opportunity to look at that particular category, “he said.
The housing sector seems to be a bit in continuity.
“The companies linked to housing works, auxiliary works, is where we are looking incrementally.”
The automotive sector is a sector that is on top in terms of being disrupted with the electric vehicle (EV) talks. Expect to see a cyclical recovery in this sector.
“We believe that there is a very good possibility that incumbents will coexist and also become part of this completely new technology environment. We expect and believe that there will be a cyclical recovery there and that stocks will be available at decent valuations. Both auto original equipment manufacturers and auto auxiliaries are a good case to look at, ”he added.
According to him, once growth and credit risk are fixed, bank stocks will be a good case in the long run.
He has a positive long-term vision of the pharmaceutical sector. In the next one or two quarters, the overall outlook for the sector should return.
“The national market continues to show reasonable growth. I think once people start visiting hospitals and doctors, the normal demand curve will improve. Inventories must be normalized and thus the normalization of demand will be carried out ”, he said.
Sambre is overweight on the benches. “Growth is gradually picking up. At least for the private sector banks, it has been decent. Fundamentals should prevail over the long term and things should normalize, “he explained.
For the full interview, see the attached video.
(Edited by : Dipikka ghosh)