Auto, private banks and NBFCs look attractive in medium term: Saravana Kumar

In an interview with ET Now, Saravana Kumar, CIO, LIC Nomura Mutual Fund, shares his views on the market. Excerpt:

ET Now: The weakness has stemmed from a number of factors , both domestic and global. Corporate earnings season has been fairly disappointing. How worried should we be at this point of time?

Saravana Kumar: In the last one week or ten days, the market has been volatile, mainly because of the global development on Chinese front - currency devaluation and others. But, if you look at India’s fundamental, it looks very strong. Whatever the Narendra Modi government has done for the past year is going to percolate, going forward.

So, we have seen about 7% or higher correction in the markets in the past week. Mostly, the midcaps and smallcaps have corrected. But, current market levels look very good because fundamentals are good. See, the fall in crude oil price from $110 onward to below $46-45 per barrel mark is saving India more than $145 billion in fiscal deficit. We have been able to reduce the fiscal deficit. So, that is a positive factor, number one. Other factors include recovery in the IIP numbers.

ET Now: What are you telling your investors to do? Should they buy into these dips or you think there is more amount of turmoil ahead and they should be waiting and watching as of now?

Saravana Kumar: See, we are interacting with our investors, distributors and we are telling them it is a time to lock money from a medium-to-long- term point of view. It is a time for buying into quality business, good management. I am not saying all the sectors, but some of these sectors look very attractive. We find auto, auto ancillary sectors very attractive and quality private sector banks and NBFC look very good, too. Then, the pharmaceutical sector also looks good and IT sector, too, is good. Therefore, we are selectively putting money and ideally it is time to put money to work for a medium-to-long-term point of view.