Kotak Mutual Fund remains positive on private banks; overweight on chemical and cement companies

Further, the fund house remains bullish on private banks with ability to lend more and earn more and where there are no capital adequacy issues or legacy asset quality issues.

The chemical, cement and private sector lenders have performed well and have given strong results in the third quarter, Upadhyaya added.

He expects the trend in these sectors to continue and remains overweight on these sectors.

While giving his overall prognosis on the auto sector, he further mentioned, “There are structural as well as cyclical issues. Some of the cyclical issues will resolve themselves at a certain point of time. We still don’t have clarity on structural issues."

"The valuations – more or less – have come back to earlier levels given there has been some improvement in liquidity. So at these valuation levels, we are not looking to increase our allocation to auto anymore," he said,

The brokerage remains positive on oil and gas space as the sector is continuing to see steady demand.

"If the return ratios are very high and the valuation is on our side, we should be investing in some of these names and that is what we have done. Almost all of the names have come with good set of numbers during this quarter and we expect that trend to continue even going forward. We continue to hold on to them,” he said.