Stay put on growth bets, forget contra: Arun Thukral

Metal stocks in India should continue to do well although there will be intermittent bouts of profit booking, says Arun Thukral, MD & CEO, Axis Securities, talking to ET Now.Edited excerpts:ET Now: Do you think one can be contrarian in this market environment or do you still ride the wave with high growth sectors like consumption, private sector banks and IT?Arun Thukral: Since India is growing at the highest pace, why not look at the growth sectors? When one gets into these sectors, there will find many triggers over the next year like the elections, crude worries and US Fed woes. So, opportunities will come. It is better to get into these areas at this point of time.Even if housing finance companies and NBFCs have become costlier, they are still good opportunities. Their recent results, whatever has come so far, have been great. It is better to get into these sectors and stocks now and the opportunities will come.Coming to the contrarian call, if you look at pharma, you are not going to gain much because of the pricing pressure in US. In PSU banks, the market share will shift to private sector eventually. We are not looking at these contrarian bets and are happy to look at the growth sectors. Being stock specific, buying on dips and accumulating at almost every dip will pay better than the contrarian bets.ET Now: How do you position yourself on the investment cycle theme? Do you think there is scope for engineering companies or real estate names or any of the high long gestation period businesses to come back?Arun Thukral: We are looking at the infrastructure space. The election is slated for next year and before that, the government has to complete many projects. A huge allocation has been made to some of the EPC companies, companies with asset light balance sheet and companies where execution is good and who are completing projects before deadline. These are the spaces we are looking at because the investment cycle from the government side is picking up.The Indiabulls group is moving up on a daily basis; they represent a variety of businesses – housing finance, infrastructure, insurance broking and microfinancing. Why are markets suddenly taking fancy to some of these companies? Not talking about the Indiabulls group specifically. but any good financing company with good execution capability, ability to contain cost of funds by borrowing smartly and investing smartly and having businesses that are doing well -- be it in housing finance, real estate or NBFC space, are right bets.Similarly, if you are saying that housing for all by 2022 is the aim, then companies in these sectors will continue to do well.ET Now: There was a selloff in metal stocks last week, largely because of a rout in aluminium prices. Do you think metal stocks have done their bit in the short-term?Arun Thukral: Metal stocks were on an uptrend over the last few months as we saw a hike in aluminium prices. Then there was a selloff but they are inching upwards because of the overall positive. Global economies are expanding and so commodities will do better than it was doing earlier. Metal stocks in India should continue to do well although there will be intermittent bouts of profit booking and one should take advantage and buy on dips. Overall, we are positive on the sector.

from The Economic Times https://ift.tt/2HIcoPJ