Recovery cycle not picking up: Vinay Khattar, Edelweiss Financial Services Limited

In a chat with ET Now, Vinay Khattar, Head Research (Individual Clients), Edelweiss Financial Services Limited, shares his views on the market. Excerpts:

ET Now: What would your advise be to your clients for infrastructure/PSU banks/cyclicals?

Vinay Khattar: We will broadly categorise all these sectors as cyclicals whether it is infrastructures or banks and so on and so forth. Now on the cyclical side, the clear call that the market was taking was that there is going to be a recovery in the cyclical probably faster than what lot of people felt and at this particular point in time, market is debating on how fast it would recover.

Now, the on-ground checks indicate that except for one or two segments, pick up in CV cycle and CV demand, etc, in most of the places the recovery cycle is not picking up, the credit growth numbers have not gone up and some of the auto ancillary guys whom we spoke to in the two wheeler segment continue to excercise caution. There is no clear pick up in that number and NBFCs or the collections. So it appears that it is going to take a while before there is a clear pick up on the cycle.

For people who would want to not play cycles and just buy stocks irrespective of the sectors, there are more balanced bottoms up approach in terms of buying quality businesses with good management and good capital efficiency ratios and that is the way to go.