Dalelorenzo's GDI Blog
7Jul/210

PGIM India Mutual Fund picks 4 major themes

Srinivas Rao Ravuri, Fund Manager, PGIM India, says he is betting on four themes - digitisation, healthcare, financialisation and consumption. Edited excerpts: What is the famework that you are adopting right now to play the ongoing sell round? Do you think economy-facing spheres will start doing well? Our investment philosophy is GARP - growth at rational rate. Investing in equities is all about endowing for increment. We have to look for companies that are growing, but it is also very important to know the price you are paying for growth. Broadly, we like four topics. The first and foremost theme is digitisation, whether it is IT or internet. We will see increased invest in IT. Corporations that are engaged in this business will do well, whether it is software companies or internet firms, whether it is a global opportunity or Indian opportunity. The second topic we like is healthcare. There are two directions. Indians are going to live longer than what we used to do in the past. This means we will spend more on healthcare. The second motorist is exportation opportunity. Indian companionships now have a somewhat tolerable market share in the US and a few other groceries. That opportunity will continue to grow. This pandemic has proved that Indian companies can address this market. The third thing we like is financialisation. Even today there are only four crore credit cards vs 75 crore debit cards. So the piercing of credit cards has a long way to go. The fourth thing that we are playing is uptake. This is a theme that we are playing across our world-wide monies too. In India, the middle class will continue to grow a lot in the coming years and all sectors catering to this segment will continue to do well. It is basically on the discretionary side.On capex themes, I think it is more of an opportunistic frisk. After virtually 10 times, we are seeing some recuperation in capex spending in the country. We are positive on this seat as well.Which is the most attractive opportunity in the entire healthcare space in your opinions? The report contains two clear opportunities. One is the domestic market opportunity, second is exportations. Indian pharma companies have invested in expanding both their capacities and capabilities over the last five-six years. As a consequence of that, there has been lesser regulatory issues. But I do not think this can be taken for granted. Pharma corporations continue to invest to ensure that they meet all the norms. So I am bullish on companies that are catering to domestic busines with secular rehabilitations. We are looking more at business that have been catering to world clients and trying to build their own distribution network. So many companies have become substantial inroads in this. We have been overweight on pharma and that is one of the key motorist for our very strong performance in the last 18 months or so. We remain positive on pharma. Strength furnishes have been buzzing over the last couple of days. How you analysing this pocket because it is quite cyclical? Actually, the business is not cyclical at all. Power consumption has been growing steadily for many years as the per capita income goes up. We will consume much more than what we are consuming today in terms of electricity and companies that are catering to this should do well. In 2006 -0 7 when ability was a hot sector, there was undue financing as everybody thought they can meet tonnes of money in superpower business. In actuality, given that it is a regulated business it is not easy to build so much money. In addition to being able to that, in the last two-three years concerns over traditional or coal-based power plant has been rising, had contributed to massive de-rating. In the last few months, there has been a clear revival of interest in the ability area. First of all, these companies have clear PPAs which last for 10 -1 5-20 years. Look at these evaluations they are trading it. The dividend harvest is 4-5 %. I think there is a definite event for investment into some of these companies where you are sure about the business sit and the valuation that you are paying for.

Read more: economictimes.indiatimes.com

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