Fund Manager Talk | Worst may be over for cement, metals and durables: V Srivatsa, UTI AMC
V Srivatsa, Fund Manager — Equity, UTI AMC, sees opportunities in cement, metals and durables companies as they are disappointed in earnings and the worst may be over for them in terms of downgrades.
«Given the low base and strong festive season, we see some turnaround around consumption-oriented sectors such as FMCG, autos and durables. We may also see a recovery in the oil and gas companies as the refining margins and oil realizations could be better in the second half,» he says. Edited excerpts from a chat:
Mutual fund inflows have been strong even when the market is falling. How much cash are you deploying in your portfolios amid the market correction?
V Srivatsa: UTI Large and Mid-cap Fund typically has around 4-5% cash in the fund at current levels. We are in the process of deploying some of the cash into buying equities, however we would need to maintain at least 2-3% cash to meet any unforeseen redemptions.
SIPs have become a counterforce to selling by FIIs. Do you think the monthly SIP flow can hit Rs 1 lakh crore mark as soon as 4-5 years?
V Srivatsa: The current SIP flows are around Rs 25,000 crore at gross level. While this is healthy and constitutes more than half of the gross inflows into equity funds, the penetration has increased meaningfully in the past few years and next four to five years growth would be more of a function of increase in savings rather than higher share of penetration. We expect strong growth to continue, however it may not be good enough to reach the figure of Rs 1,00,000
