Aman Chowhan, fund manager at Abakkus Asset Management, said he is focusing on stocks where he finds the risk-reward equation favourable.

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Chowhan, in an interview to CNBC-TV18, said of late he is focusing on logistics, infra, IT and selective on pharma.

On logistics, Chowhan said, “Logistics is a clear beneficiary of the rising e-commerce trade that we are seeing and in the open up trade so as business picks up, as momentum comes in, GDP comes in we feel logistic as a space has a good advantage to grow and improve. This is one sector where you have both operating as well as financial leverage kick in and that is the reason we are quite positive on the logistic space.”

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“Broadly end-to-end 3 PL companies, end-to-end logistics management companies, last-mile connecting companies these are the spaces that we are looking at and we are positive.”

On infra sector, he said, “We feel over the next two to three years the kind of PLI schemes that have come in, the kind of uptick we are seeing in manufacturing, the kind of thrust the government has put in on creating infra both on roads, railways, airports as well as urban infra, most of these companies are very well placed and they have a strong tailwind as far as the order inflows are concerned."

"Most of these companies that we are looking at have very strong working capital, if not generate free cash, but they are able to manage the growth without equity dilution and that is one space where we have very selectively, but very positively looking at companies.”

On IT, Chowhan said, “As far as IT is concerned, we feel that the demand environment is still very strong. Today it is a problem of supply and demand, most of the companies are struggling to fill in the space, places that they want to fill in. So from a near-term, as well as from a medium-term view, IT still looks very strong because that is where the demand momentum is. Companies have very strong balance sheets, free cash flow generating companies, great management, and India has a natural English-speaking advantage compared to what the world offers. That is the space that we still continue to like.”

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On pharma, he said, “Pharma has been selective, clearly there have been some margin pressures for pure-play US generic pills that is one segment where some companies have got impacted. There is also margin pressure on account of irregular or higher-cost supplies of API's from China. So you have to be selective in pharma. So wherever you feel there is a margin pressure coming in or you are not fully integrated or backward integrated, then that is not the space within pharma that you would be keen to stay invested. Stick to companies where you have a good grip on your margins.”

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(Edited by : Bivekananda Biswas)

First Published:Sept 29, 2021 4:44 PM IST