Market Veteran Madhu Kela said volatility in the market is an opportunity to get in.

One should keep in mind that volatility is here to stay and one should make use of it to enter spaces which they always wanted to but could not because of high valuations.

“Volatile gives you an entry point into good companies at good prices,” he said.

Buy selective companies and if you have done your homework properly then the time is right to get into them, he said.

The themes he would focus on are PSU banks, road sector, consumption space that includes liquor, auto ancillary etc. Would look at selective pharma and midcap IT as well, he said.

The PSU banks over the medium-term offer lot of value and although you cannot buy the whole sector, choose 3-4 banks and by the next two quarters most of the NPA issues and recognitions should be out. The bottoming out process has begun, said Kela.

With regards to road sector, he said the government has done a good job of awarding jobs, so they good from a 2-3 year perspective.

In liquor stocks although the price performance has been superlative there is still value in them, he said.

The hunky-dory days of buying everything and anything have now gone, one has to the homework properly and buy selective companies with a good timeframe and not for immediate gains, said Kela.

“One has to be selective and look for cos that have good governance,” he added.

When asked if election could be other source of volatility he said in the last 3 years no one has been able to call politics right but as of now it is still early to take a call on that. In fact one should use the volatility to one’s advantage, he advised.

“The only way to make money is bottom-up basis,” he said.

When asked if there would be an adverse impact of flows into mutual funds, he said the industry would continue to see decent inflow and SIP would continue at the same pace.

When asked why he was bullish on PSUs banks, he said firstly, valuations are favourbable. Second, resolution is already in place which could take place this quarter as well. However, it is important to have a 2-3 year view on them.

He is not keen on consumer stocks that are already trading at 50-60 PE multiples.

Insurance companies could be held with a timeframe of 3-5 years, he said.

First Published:Apr 13, 2018 11:01 AM IST