Mr. Niket Shah
Fund Manager - Motilal Oswal Asset Management Company Limited
Niket has 8 years of rich experience in tracking the Midcap stocks covering array of sectors like consumers, media, e commerce, chemicals, textiles and Agri . He holds M.M.S. - Finance (Master of Management Sciences) from Wellingkar Institute of Management, Mumbai.
Do you believe the demand outlook will begin to weaken as a result of the central bank's intention to maintain an accommodative withdrawal stance, or do you believe the rate hike scenario will deepen?
We believe demand outlook as of now continues to remain robust however as we go into next year we should see some concerns on growth. Our view is that the intensity of rate hike will meaningfully come off post January 2023.
What is your current asset allocation in this scenario of global uncertainty and unpredictability?
We have moved more to plays which are most focused on domestic economy. Example Consumer, Auto, Capital Goods, Cement and Banking. We have dramatically reduced our allocation to global plays like IT.
Do you think rebalancing is an important step that one needs to take whenever it comes to realigning your portfolio goals? How do you rebalance the portfolio?
Yes re-balancing is very imp as we have to understand cycles. Last year we sold IT, Cement in Oct-Dec Quarter and bought Auto and Capital Goods. When cement corrected we added in this fall and at some point of time next year we will re look at IT. Last year in IT valuations were peak and earnings upgrade cycle was coming to an end and we could see headwinds and hence we took a call to take off money from the table. Similarly in cement, valuations were at peak and earnings upgrade cycle was behind. However in auto and banking it was reverse.
What is your evaluation of the plunge in various currencies including the rupee?
Rupee is a factor of balance of payment which clearly appears to be impacted as exports are hit due to macro issues. Hence in the near term, I expect it to move to 85-87 range. Historically rupee depreciation hasn’t benefited IT margins . however pharma does get some benefit but not very significant to call out . Hence benefits of rupee depreciation on sectors over time is negligible as indian companies use that as an opportunity to gain market share.
Which were the best or the worst investment decisions that you have taken so far?
Best Investment Decisions – Tube Investments, CG Power, IRCTC, ITI Persistent Systems, Campus Activewear Not so good Investment Decisions - Voltas, BEML and Gujarat Gas
What should equity mutual fund investors do, considering the year is almost ending? What’s your outlook for the next year?
My view is that we are in the last leg of issues of inflation getting solved out. We expect US inflation to start coming off post January and hence intensity to come off as well. When liquidity is taken away, the bad news comes first and then the good news and vice versa . Our view is next 6 months markets will remain volatile and this should give us one of the best opportunities to enter into markets from 3-5 year view.
