Harendra Kumar, Managing Director, Elara Capital, says he is positive on Dabur, Ultratech, Infosys, Zee Entertainment and Infosys.
Elara Capital MD Harendra Kumar
Q. What should be the strategy in this market?
A. We are asking investors to stay the course
, which is to play basic structural themes such as consumption and weak rupee
, and avoid beta. It is time to pick up stocks rather than trade on risk. The market has misunderstood beta and most high-beta stocks have already risen.Q. When do you see rate cuts happening?
A. Rate cuts may happen in December
. The next year also you are going to see a 100-150 basis point rate cut. Q. Do you think the current rally will sustain?
A. A lot of Participatory-note money has come in. Its sustainability will be interesting to note. The rally is already fizzling out.Q. What is your view on stocks from infrastructure and real estate sectors?
A. There are two issues here. Macroeconomic issues, which the government is trying to address by making funding available. The second are issues at the company level. Companies that are highly leveraged cannot take more debt and equity funding is difficult in this market.
Infrastructure will take a long time to recover. Real estate will see movement next year but only good stocks such as Oberoi Realty and Sobha Developers will do well.Q. Which sectors or stocks would you recommend?
A. We like consumption stocks. Defensives will rise more
. Consumption is keeping the economy alive. Since the US is recovering, pharma and tech stocks will also do well.
Q. Which are your top picks?
A. My top picks will be Dabur, Zee Entertainment, Ultratech and Infosys.