Where Tata MF is investing in real estate and pharmaceuticals sectors
Chandraprakash Padiyar, Senior Fund Manager, Tata MF, says “all parts of home improvement look quite attractive to us. Whereas it is more about company specific within the sector that you choose from for your portfolio. But if you look at the general growth trends for the overall sector, I would say that the next three-five years look quite interesting for the overall home improvement sector. Within our portfolio, we are more towards the plywood space and sanitaryware ceramics.”
What are your thoughts on this valuation argument for the broader market versus the larger cap universe? The argument now coming out is that the larger cap universe is much more fairly valued and mid and smallcaps have run way ahead of fundamentals and hence the tilt should be towards the largecaps. Do you subscribe to this argument?
On largecap versus mid and smallcaps, I also at this point in time, maybe for the next 12 months or so, belong to the same camp which says that there is reasonable valuation on the largecap side and a part of midcaps and small caps may have run beyond fundamentals for a short period of time.
It needs some amount of consolidation or correction, whereas there is room for upside in largecaps per se.
Tell us about real estate space. I see some names in your fund. Real estate is coming out of a 10-year bear cycle, but when we look at the numbers, when we talk to some of these real estate managements, the offtake seems to be surprising us. Where is this coming from? Does it appear more structural this time?
So, rightly pointed out by you, demand is good but the more important point about real estate today is that supply is limited.
