Bargain hunting and a long-term perspective can deliver superior capital appreciation. We follow a bottom-up approach to investing, with a focus on large-cap and liquid stocks. We look at the company's assets and long-term earnings profile, rather than near-term momentum numbers.
The fund has a significant allocation to the FMCG sector. What is the rationale behind the allocation, given the slowdown in the sector?
Price wars and increasing input costs have put pressure on companies' topline and margins. This has led to pessimism about the sector. But such pessimism offers good buying opportunities.
What is your outlook for the auto sector (your largest holding)?
Auto firms are likely to benefit from structural increases in demand. The growth in the economy has enhanced affordability to consumers. Hence, short-term events like a delay in monsoon are unlikely to impact the sector much.
Moreover, leading firms have been foraying into the global markets. In the case of auto ancillaries, foreign original equipment manufacturers (OEMs) are looking for low-cost suppliers from India.
What is your outlook for the stock markets?
As far as domestic markets are concerned, a lot will depend on international oil prices. If prices continue to stay at higher levels, it could result in demand blips for various sectors.
