Keep cash in hand and wait for a further correction or deploy in certain pockets? Ajay Vora explains
Ajay Vora, Executive Vice President and Head — Equities, Nuvama Asset Management, says a consolidation phase is happening. If you're looking to invest, focus on areas where growth forecasts are improving and visibility is increasing. For example, banks are currently in a value phase, but investing in them requires a longer-term perspective. Your investment strategy will guide your choices, but there are good opportunities available in the market.
What to make of this weakness in some of the financials? Everyone says the valuation is comfortable and the worse with respect to asset quality is perhaps over. The competition from MFI, etc, also has come down. Then why are people still not interested in buying some of these financials afresh?
Ajay Vora: It is clearly the lack of growth. If you look at the largest private sector bank which reported the numbers, the NII growth was less than 10%, the PAT growth was around 2%. Until the time we do not get clarity on the growth, valuations may look cheap but I think that is clearly not the reason for someone to get in unless and until we get more clarity on the growth coming in the next few quarters.
So, staying away even from largecap banks like Kotak, HDFC, ICICI, SBI — you are not seeing value anywhere?
Ajay Vora: As I said, the value is there but we saw a very different reaction for another private sector bank, so you have to pick and choose. My sense is that it depends on the composition of the book and wherever we are not seeing any major downside in terms of the asset
