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Investors need to position themselves in cyclicals like auto and commodities: Kivah Advisors' Mithun Aswath
"In the near term investors will focus on sectors which are not affected by COVID like IT, pharma as well as FMCG. However for the medium term outlook one needs to position themselves in the cyclicals like auto as well as commodities."
Mithun Aswath, managing partner at Kivah Advisors believes that medium term investors need to position themselves in the cyclical stocks.
He said, "From April you will see a much faster rollout of vaccines. Hopefully this is a passing phase and will fade in the next 4-12 weeks. So we need to see through this volatility and position ourselves that way. In the near term investors will focus on sectors which are not affected by COVID like IT, pharma as well as FMCG. However for the medium term outlook one needs to position themselves in the cyclicals like auto as well as commodities."
Aswath said he prefers Wipro in the IT sector.
"Wipro has been an underperformer over the last few years. Over the last 5-7 years the growth rate in their IT services business has been at half the pace of what a TCS or Infosys has done. However over the last 2-3 quarters we are seeing some sort of recovery in terms of growth from Wipro. There has been a management change, we have seen a new CEO come in and since he has come in we have seen Wipro also win some large deals. So we do believe that Wipro is on the recovery path. So as growth starts coming back in Wipro, their valuation discount should also narrow."
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(Edited by : Aditi Gautam)
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