Economic revival to benefit companies with domestic exposure; midcap IT to outperform: Envision’s Nilesh Shah

The revival in the Indian economy is likely to benefit the companies with domestic exposure the most, while the market will move higher due to the liquidity gush, said Nilesh Shah, MD & CEO of Envision Capital.

Speaking to CNBC-TV18, Shah said that the best could be behind for India Inc. in terms of margin.

“Companies with domestic exposure will gain the most with the revival of the economy and big opportunity in terms of growth going forward looks to be more in terms of home improvement, home construction, home development. This is a secular theme or maybe a structural opportunity for the next several years,” Shah said.

“We own Kolte-Patil Developers, it has been a leader in residential real estate in Pune. In addition to home development, the way we are playing, we own tier-II cement stocks as well as a bunch of building material companies like Kajaria Ceramics, Polycab. So we have been playing it in a very broad based and comprehensive manner,” he added.

Shah also said that they own stocks of building products companies like Kajaria Ceramics, Polycab India and also midcap cement companies.

He is of the view that the big opportunity in IT sector is more in the tier-II midcap IT stocks versus the top two or three frontline stocks.

“There are significant opportunities in tier-II midcap IT companies; individual companies are on a spree in terms of growth, in terms of adding verticals, adding capabilities and they could even be significant buyout candidates,” Shah said.

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