Quite okay with owning PSU stocks: IV Subramaniam

IV Subramaniam, CIO, Quantum Advisors, talks to ET Now on government related business outlook.

How are you planning to approach some of the government related businesses, PSU stocks, construction companies, builders, essentially businesses, which are dependent on government spending?

There are two parts to it. One, you asked me about PSU stocks and PSU stocks as long as valuations make sense to us, we are quite okay with owning PSU stocks. In some cases of course we would also be trying to make a guesswork as to what could be a trigger to unlock the value in some of the PSU companies and in cases where it looks like there could be a delayed action by the government to unlock the value, we would wait a little more patiently in those stocks but otherwise we would continue to look at valuations to decide whether we should be owning a PSU stock or not.

In the case of other businesses like construction and engineering, which is dependent on government expenditure, our base thought is that these expenditures would come in. It could get delayed for a few months but eventually if India needs the kind of infrastructure, which we have been talking about.

These spends will happen and so going back to looking at the business, our assumption is the order flows would come back but we would always look at the valuations and the kind of management, which we are investing in. If we are convinced about those two aspects, then it would definitely make it to the portfolio.