New-age internet cos must eliminate cash burn, turn profitable:  Rajeev Thakkar, PPFAS Asset Management

As Indian stocks hit new highs, Rajeev Thakkar, CIO & Director, PPFAS Asset Management says investors should not fear volatility as it is a part and parcel of the market. 

In an exclusive interview with BTTV's Udayan Mukherjee, Thakkar said investors should not expect an environment of steady returns for the next 3-6 months.

Last year has been tough for US markets and yet Indian markets are trading close to their record highs, Thakkar said.

Commenting on the Indian new-age internet companies, Thakkar said that such companies will have to eliminate cash burn and pivot towards showing profitability going forward.

"We own companies like Microsoft, and Apple which are very different from Zomato and Nykaa. We have stayed away from loss-making companies and are more positioned towards slightly more matured businesses," he said.

"If we look at trend shifts, people are preferring streaming media content versus TV. Digital advertising is the preferred medium over traditional advertising. Stock prices have come down, but we are bullish on digital stocks," Thakkar added.

According to the market guru, India’s consumption-oriented space has been taking a breather given that valuations have become quite expensive.

However, the PSU banking space is seeing some revival of interest, Thakkar said adding that the balance sheets are clean and the credit growth is back.

"We are trying to find attractive purchases in the undervalued space, the companies which are more asset-light and are bullish on services-related businesses in banking, financial services, and insurance (BFSI) space," he said.

Notably, the Nifty PSU Bank index is up over 60 per cent on a year-to-date basis amid the credit growth and improvement in asset quality in the September quarter.