Why should one buy into banking when the economy is slowing down? A Balasubramanian explains
A Balasubramanian, MD & CEO, Aditya Birla Sun Life AMC, says historically, if you want to build a portfolio, the best time to buy in the market is when the worst of possible news keeps coming in. That is when the market starts pricing in the news. Therefore, you will be able to get a price that you want to buy. Second, when economic growth comes in, the reward could be high. Given that our ambition of becoming a $10-trillion economy has not been taken away in the last three-four months, and nothing has changed, as long as that remains strong and credit growth is a driver of economic growth, banking sector remains a bet.
Are there any opportunities arising at this point in time because everyone is worried about going ahead and catching the falling knife?
A Balasubramanian: Yes, of course, if you take the fundamentals of some of these sectors, whether it is capital goods or auto sector, fundamentally, nothing is changing except cyclical nature. Even metal sectors have fallen.
Why do you say that? When you say that we are going through a cyclical downturn, not a fundamental downturn, a lot of factors are changing fundamentally. A Balasubramanian: Whatever cyclical downturn you are seeing, the market reacts a little ahead of time. Therefore, whatever step is being taken for reducing equity growth, that will have an impact on consumption, the spending behaviour, and that is already there in the price. Therefore, valuation-wise one has to start re-looking at it.
Give me an example. What you always said was, I like the
