But if you look at it from a style perspective, essentially what has happened is growth as a style or for that matter momentum as a style has been underperforming whereas low volatility stocks and value as a style have been doing well. Even within value, it is actually less of cheaper stocks doing well but more of the costlier stocks underperforming.
Sure we understand the reason and the fact that of course that value has been doing better than growth, but is there a structural shift now? Would you tilt your portfolio towards value versus growth and what would cause a reversal in the market momentum now?Karthik Kumar: So, it is too early to make that call but with regards to what would change the market momentum, we have got three large events lined up over the next 10-12 days going from budget to monetary policy in the West and domestic RBI policy as well which all three of them together would set the stage for the next few months.But given the selling pressure, which are the sectors where you find value at this point in time and looking at the earnings growth trajectory as well, which sectors would you like to be betting on?Karthik Kumar: In terms of earnings, effectively we are still seeing earnings continue to be strong in tech and healthcare whereas consumer staple space and commodity space in general are seeing negative earnings revisions and so those are largely the spaces that I can identify in terms of just the earnings momentum being strong one way or the other. So we are positioned accordingly where I am overweight healthcare stocks, I am overweight selective consumer discretionary stocks from a bottom-up basis and we are underweight metals, energy, and staple names in general.
But by and large, what are you doing with the portfolio in terms of the allocations because DIIs are the ones pumping money. Are you putting money to work in similar styles, similar stocks, and just deepening your exposure or are you looking at some fresh names? What are you doing with your portfolio right now?Karthik Kumar: It is a mix of both honestly. Once where we have conviction on and where we get better prices, then we might be inclined to increase our positions and at the same time look for newer avenues as the general macro environment keeps changing and so look at things and given the newer set of information as well, so it is not either or, it is more a mix of both these strategies.
But what I see in some of the key themes that you are driving, be it renewables, be it defence, and EMS space, there the valuations have been a little bit concerning. Not concerning we can say, but if we go back to the past two to three months, then the valuations were really stretched some of the experts believe. But given the correction now, do you believe that it may be a good time to add more exposure to it or are you adding more exposure to any of these three key themes?Karthik Kumar: So, we still continue to remain bullish on most of the themes that you mentioned because the earnings outlook still continues to remain decent in all the three spaces. While we may selectively see earnings revisions, but largely across the three areas earnings revisions and earnings outlook continues to remain strong, so we would still hold on to the themes that you mentioned.
