Top fund manager Mahesh Patil is bracing for a correction, he’s actually looking forward to it

By: | Updated: August 9, 2017 12:39 PM

Mahesh Patil, the Co-CIO of Birla Sun Life Mutual Fund believes that the market hasn't seen any meaningful correction in the year so far.

Mahesh Patil believes that a correction will be healthy at the current market levels. (Image: Reuters)

While other top voices are advising the investors to be cautious, Mahesh Patil, Co-Chief Investment Officer of Birla Sun Life Mutual Fund believes that a correction will be healthy at these levels. In conversation with CNBC TV-18, Mahesh Patil said that as the markets have run up by more than 20% in year to date terms, a correction is due. The expert pointed out that there hasn’t been any meaningful correction in the year so far. “A correction will be healthy at these levels”, said the CIO of Birla Sun Life.

Yesterday, CLSA, had told ET Now, “Don’t see a significant upside from here on for next 12 months”.The brokerage and investment firm believes that Indian markets will grow at low double digit growth in the next one year. Sharing its outlook for various sectors, CLSA pointed out that IT has become a low growth sector, and investors should not expect double digit growth going forward. Infosys and Tata Consultancy Services stocks have had a poor run at the bourses in the year with returns of  -10% and  -5%  respectively. CLSA predicts that the growth will be 6-8% going forward. The firm advised the investors against holding on to IT stocks for a period of more than 3 years.

Mahesh Patil believes that even though a correction is due, the markets won’t correct by more than 6-7%. He believes that there is further downside in the Pharma sector. The BSE Healthcare Index has posted negative 7% returns in the year so far. According to CLSA, pharma space may bottom out in the next 6 months.

Earlier last week, SP Tulsian had cautioned investors to stay away from the pharma sector, in light of the USFDA issue. In conversation with CNBC- TV 18, SP Tulsian said that it’s best to avoid the stocks from the sector as concerns still remain. He added that some investors may be compulsive buyers or may take exposure to the sector to balance their portfolio. For such investors, he believed that Divi’s lab is a good buy  as the stock has seen a sharp correction, after it posted below par Q1 corporate earnings.Talking about the investment horizon for the pharma stocks he said, “Have these stocks only if you have a minimum of 1 year timeline”.

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