Kotak Mutual Fund is selective on stocks as valuations are on the higher side, Harsha Upadhyaya, CIO-equity, told CNBC-TV18. Upadhyaya also said that the firm is positive on financials as they are linked to India’s economic activity.

“As a strategy, we are remaining fully invested but we are very selective in terms of what stocks to keep in the portfolio, or what are the new stocks that come into the portfolio because the valuations are on the higher side,” he said.

He further said, “We believe that we are at the beginning of a new corporate profitability cycle and if that assumption comes true then there is more upside to the market. Yes, there will be intermittent corrections even in a bull market. So, to that extent, one should be aware of the valuations that each of the stocks are trading at, but we remain fully invested in them.”

On sectors, Upadhyaya said, “We have an overweight stance on various other cyclical buckets. I would consider even financials as cyclical which are closely linked to economic activity.”

On metals, he remains positive and is impressed by the sector’s deleveraging strategy.

As far as the IT sector is concerned, he believes midcap IT stocks are trading at relatively higher valuations.

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(Edited by : Dipika Ghosh)