The full outbreak of coronavirus in India is not priced-in if we have Italy, China and Korea type of situation, said Pratik Gupta, CEO & co-head-institutional equities at Kotak Securities.

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“The general assumption is that a couple of weeks later we will be back up and running. So from that perspective the stock prices are down, the index is down about 25 percent in the last one month and individual stocks are down 30-50-60 percent. So, the selloff does seem overdone even if we take into account the cuts in earnings estimates for the next few quarters and therefore, for FY21 as a whole,” he added.

“However, from a broader regional perspective India is down 25 percent in the last one month and that’s in line with what we are seeing across Asian emerging market universe whether it’s Korea, Taiwan, Singapore, Thailand, Indonesia etc.,” said Gupta in an interview with CNBC-TV18.

With regards to the market performance, he said, “If we take an assumption that the outbreak in India will not be as bad as what we have seen in some of the other countries whether it’s because of the weather, our immunity or whatever and also keeping in mind the big oil price decline that we have seen which is hugely beneficial for India and does help offset, some of the impact of coronavirus – that should result in India recovering a lot quicker.”

“However, short-term, there is a lot of uncertainty but for fundamentally oriented longer term investors, we are saying that this is a good buying opportunity, stick to quality,” he further added.

When asked about banks, Gupta said, “We need to be watchful of banks which have a very large exposure to SMEs, retail sector, airline, hotel, tourism etc. these are all sectors which will significantly get impacted but it would be naïve to assume that the authorities will not step in and do something like what they have done in the US and so on whether its forbearance on recognition of NPLs, direct subsidies or some kind of fiscal packages for the affected sectors and sector which got impacted because of lockdown due to coronavirus.”

“Therefore, in general, we would stick to our view that this is a great opportunity to buy a long-term high quality franchises, some of the top private banks have also come off 20-30 percent. So that’s a good opportunity for long-term investors in our view,” Gupta added.