The private financial sector is a great bet for investors at this point in time, according to Chandresh Nigam, MD & CEO, Axis Mutual Fund. In an interview with BusinessLine , he also advised investors to stay in the large-cap space, where liquidity is assured. Edited excerpts:
Which sectors in the equity market interest you now?
We basically look at companies from the bottom-up; we are focussed on the top 300 companies that create wealth. We have seen opportunities in auto, pharmaceuticals, consumables, durables, staples, IT, capital goods, infrastructure, oil and gas.
Banking and NBFCs, especially in the private sector, are a huge space; they are building great businesses generating 18 per cent return on equity. However, the overall risk-return is favourable in large-caps now, not in mid-caps. If you buy too much in the mid-cap space, your liquidity profile will be affected.
Do you think an interest rate cut by the central bank is likely?
Obviously. I think the markets are expecting it. The RBI Governor doesn’t have to play to the market, however. I’m conservative, so I think he will do a 25-basis-point cut. But I think whatever is done should be sustainable. The last thing you want is a 50-basis-point cut and then for him to say this is the end. That would leave the markets spooked.
Is Axis working on launching new funds?
The retirement fund is something we are excited about; we are awaiting approvals from SEBI. We also want to do a dynamic asset allocation fund and a multi-asset fund.
