What are your thoughts on the valuation of the market?
Jitendra Sriram: In one, one-and-a-half months ever since the poll verdicts have come out, you have seen the markets slowly grind up over this. So, now with another important event, probably there is a little bit of nervousness overall in the markets that whether there could be some issues related to say taxation or something related to tenor of how equity is defined, etc, etc.
But I would probably say that valuations are not excessive at this point, we are probably trading at about 21 times forward earnings, so it is not something like way euphoric, but obviously with the kind of immediate, the kind of push up that the market has got probably it might consolidate a little bit at this point of time.
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So, would you be kind of cautious or selective in deploying fresh money and if you are already running a decent-sized portfolio, would you keep it as it is and walk through this big event or whatever corrective phase we are in?
Jitendra Sriram: So, if I look at on an average, we are between probably 3% to 4% in cash across all our funds at this point of time, but we are just like normal level. It is not that because of this event we have actually raised or subtracted to our cash holdings.
But I would say that if new money is there, obviously maybe we will keep some ammunition post budget because just to take stock of it at that point of time.
See, the budget is not only about the taxation part, but for NDA 3.0 it is also a policy statement highlighting what their focus areas are going to be.
In a sense if we are seeing some tweaks in terms of their focus areas, I do remember that between NDA 1 and 2 also there were certain differences. NDA 1 was largely about roads, etc, whereas 2 was far more focused on railways, defence, etc.
So, what I would say is that if you see a little bit of tweaks in terms of the policymaking, one will need to veer towards that.
So, if I already have new money, I do not want to get into something right now, again, look at doing some tweaks one week down the line. So, I would rather hold it and do that after the event is past. What are the areas of the market which you even find attractive if it comes down, you would be very comfortable getting back into because the story is much more structural.
Jitendra Sriram: So, I would say that at this juncture we are quite positive on areas like pharmaceuticals, that is something definitely which is looking interesting to us. Secondly, I would say even the entire consumer durable space is quite interesting.
Thirdly, I would say the power ecosystem seems quite promising. Having said that, I would say that industrials, there are certainly certain pockets of exuberance at this point of time which we would be quite cautious on.
So, industry has you not only have manufacturing, you have railways as a pocket, you have defence as a pocket, you have power equipment as a pocket and so on and so forth. But I would say certain pockets are definitely running a little ahead of the fundamentals as it seems at this point of time.
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