The only theme we are pushing is be brave, buy at these levels: Amish Shah, Antique Stock Broking

In a chat with ET Now, Amish Shah, VP-Sales, Antique Stock Broking, says because IT and pharma are slightly in the doldrums right now, if I am a fund manager, I would rather be in staples right now.

Edited excerpts:

What is the narrative right now? Is it one of caution because the market has run up a lot and we have one important event, the UP elections or are you telling your clients to go out and buy?

No. Clients overall are taking a slightly longer term call. So they are no longer evaluating companies on a 2019 basis. They are happy to invest in good companies with a 2020 view as well. We have seen tremendous interest as far as the midcap stocks are concerned. We have had the largest funds, we have had the FIIs, private equity players eyeing the midcaps space more than the large cap space which just tells you about the current mood of the markets right now.

What are the themes that are playing out as of now? We just had Rajiv Jain who is a veteran EM Fund manager and Morningstar called him Star EM Fund Manager in 2012 talk about how it is time to shift from consumer true blue defensive names to cyclical. Is that the focus of your conference as well or are there more interest in the cyclical stories, investment led themes?

As a house, we have always been very positive on the cyclicals and over the past two quarters, we have been tom-toming that story to all our investors. Most of our investors are coming on board with that theory but having said that, I would not write off the staples space at all given that the FM in this budget has given a small levy on the tax front for the low income category.

That coupled with two years of slow rural growth augurs well. May be we could see a good recovery going forward. Because IT and pharma are slightly in the doldrums right now, if I am a fund manager, I would rather be in staples right now. That is one category to watch out for if you ask me.

Give us your preference within the banking space. What is it that you are pitching for in terms of a growth versus value story there? There is value in PSU banks but there is asset quality concern and uncertainty on growth. Private banks are price to premium but even so, growth seems to have slowed down. I do not know how those multiples really stack up and the NBFCs have also seen a strong run. Where is it that one can generate an alpha and what is it you are telling clients to do?

We are more in line with consensus. We are restricting ourselves to private sector banks. Amongst the PSU banks, we would stick our neck outs and go long on SBI even at these levels. On the NBFC space, however, we are very very positive especially on the small ticket housing finance companies and the gold finance companies. These are two spaces which have not really been discovered by the markets and we feel there is immense value for these stocks.

What is the favourite theme right now, I mean, we can talk about banks, NBFC, so and so forth but if you were to tell your midsize institutions who are not averse to taking bets even at the broader end of the spectrum what is the top theme that Antique is selling out to its clients right now?

The only theme we are really pushing is be brave, buy at these levels. We are in for the long haul, you are going to make a lot of money. We may see a couple of months of volatility but I do not think it is going to matter at all. I think this market is here, it is in the bull phase, I think it is time to buy.

Do you reckon we could be close to 10000 by the end of the calendar?

It is very difficult to put a Nifty number right now. The trajectory is very clear, we are heading upwards from here for sure.

Today the space that is in focus is oil and gas. While upstream is doing extremely well, OMCs are getting pummelled in trade, results have come out. They are not the greatest and it is a space that is dominated by PSUs which are gathering a lot of attention. What are your thoughts here?

We like the OMC space. Obviously the results of HPCL was disappointing from the GRM aspect but we believe with a 5% correction form here, it is a good opportunity to accumulate stocks like these. We are very positive on the gas side so we like stocks like Indraprastha Gas, we like Gujarat Gas as well. So these are stocks that we are definitely positive on. GAIL is something that we are very-very positive on as well.

If we consider commodities as a theme, is it core to the fundamental research at Antique as the stocks have had a massive rally and have pretty much led the move last year?

If you see the commodity basket as such, they move in a similar format like they have moved last year. We believe the cycle is turning around for these metal stocks and we could see a prolonged cycle as far as these stocks are concerned. Maybe you know we are not very positive on steel. For that matter, we like a few mining stocks like NMDC or MOIL a little differentiated names but these are names where we believe people can make a lot of money.