UTI MF's V Srivatsa says stress in real estate a pressure point for NBFCs

"If I look at both of them, anybody with significantly high exposure to the real estate space will continue to face stress and may see more downward pressure even from these depressed levels,” he said.

Sector-specific, he said, “Financials is something that we are buying still. We are being positive on corporate-oriented banks which have also incrementally being a bigger player in the retail space. So, we are buying that. Automobiles, continuously on every decline we have been buying in the last two-three months. I have also been buying a little bit of metals. I believe the valuations are quite attractive from a longer-term perspective.”

Srivatsa is also overweight on the pharmaceutical sector. “Companies which have very high exposure to the US, I think they are on the slightly riskier model because you just do not know when the US FDA will come and hit you with some kind of a warning letter or 483’s. However, having said that, if you look at the largecap generic companies which have both India and US, I think today if I look at the market cap, 60-70 percent of the market cap comes from the Indian operations which are still growing, quite profitable, and cash-rich,” he added.