Even as the midcap indices continue to trade at all-time high levels, Harsha Upadhyaya of Kotak Mutual Fund says that midcap stocks appear to be overvalued in relation to largecaps and advised investors to move to large-cap stocks.
Even as the midcap indices continue to trade at all-time high levels, Harsha Upadhyaya of Kotak Mutual Fund says that midcap stocks appear to be overvalued in relation to largecaps and advised investors to move to large-cap stocks. In an interview to CNBC TV18, Harsha Upadhyaya CIO-Equity, Kotak Mutual Fund said, “On valuation front, midcap is relatively higher compared to largecaps. As asset sizes increase, the challenge increases to find value in the space. However, funds which are mandated to invest only in midcaps will try to find opportunities within the space. Multicap portfolios where we can move across market capitalisations, our tilt is towards largecap. We have been very focussed on largecaps within the multicap segment,” he told the channel.
As the buoyancy in Sensex continues, with the 30-share barometer closing above 33,700 yesterday, the expert said that he sees minor upside in the index going forward. “”We expect the market to consolidate from hereon and may see some minor upside,” Harsha Upadhyaya said. He feels the market is resilient now. September quarter earnings were largely in line and better-than-expected.
Many analysts have pointed out of late that the second quarter earnings have been better than anticipated. Taking stock of earnings reported by India Inc in the quarter gone by, research firm Motilal Oswal says that it was a ‘breath of fresh air,’ as most of the corporates have beaten street estimates. In an interview to CNBC TV18, Gautam Duggad of Motilal Oswal Securities said, “The earnings have come as breath of fresh air and one can look forward to better earnings due to base effect and disruptions behind us.”
Harsha Upadhyaya said that the fund house is closely tracking developments in the construction sector. Construction sector has been in focus after the government announced Bharatmala projects and affordable housing. It will take at least 1-2 years for order inflow, he pointed out.
“As of now, we are just trying to nibble around the sector. We will increase exposure to this sector once the execution starts,” Harsha Upadhyaya said. In the same interview, Harsha Upadhyaya said that IT sector continues to remain under pressure. “We avoid sector and we are not overweight on the same. We need to see earnings recovery before getting into sector,” he explained.