Max Life Insurance positive on EPC companies; expects autos, hotels to see pent-up demand

Max Life Insurance is positive on domestic engineering, procurement, and construction (EPC) companies, Mihir Vora, director and chief investment officer (CIO), told CNBC-TV18. Vora also said that he expects domestic themes to start performing post-monsoon season.

“Domestic consumption is something that we have been underweight on but domestic infra, especially government facing infra, is something that we have been positive on like the construction (EPC) companies,” Vora said.

On market, Vora said, “The retail participation in the market continues in the form of direct demat account opening and direct trading, or through systematic investment plans (SIPs), and bulky or regular inflows into mutual funds and unit linked insurance plans (ULIPs).”

“Bulk of the action has been (last year) in the non-domestic sectors. The best performing sectors have been IT, exporters and commodities to that extent. And if the economy does come back, you will see that there is a lot of underweight in the domestic-linked themes, whether financials or consumer discretionary names like auto, hotels, travel and tourism, all the pent-up demand trade will come back to the fore,” he said.

On investments, Vora said, “We have been consistently overweight on the outward-looking themes like IT, pharma exporters, auto ancillaries, which are exporters, and even commodities, which is also leading to a lot of global demand. But now that we are in the fag end of the monsoons, and the busy season locally is coming in, if there is no third wave (COVID-19), then it will definitely be a time to look at the domestic segment, discretionary, financials kind of names which have not done so well in the last one year.”

For the entire interview, watch the video