Carnelian Capital expects further correction in market in next 1-2 months

Vikas Khemani, Founder of Carnelian Capital Advisors discussed fundamentals of the market.

“We might see some sort of correction in the market over the next one-two months,” he said in an interview with CNBC-TV18. “Markets will remain edgy and worried,” he added.

“This whole rising COVID-19 situation is somewhat worrisome. It looks like that things are going to get a little difficult as far as the number of COVID-19 cases are concerned. At some point in time, government will be forced to react. There may not be a full lockdown like last year but it could be some sort of measures partly being implemented,” he said.

“Because of this the recovery on the demand side can slow down or get postponed. Also, the supply chain issues which were expected to get sorted out might not get sorted out. So the pace of recovery can get postponed by a quarter or two,” he added.

In terms of portfolio, he explained, “We don’t make very tactical changes in our portfolio. We invest from a three-five year perspective. We don’t worry about what happens in a quarter or two. We will have challenges over the next two-three months and the idea is to remain underleveraged and remain defensive to some extent.”

Khemani is overweight on some of the defensives like pharmaceuticals and IT sectors.

“We have overweight positions in our portfolio, we are very positive about the structural driver of IT sector. Most IT companies will report very handsome growth over the next three-five years,” he pointed out.