“If you are invested in good quality front line stocks which you had picked up with a specific thought, there is absolutely no need to panic and exit at this juncture,” says Sudip Bandyopadhyay, Group Chairman, Inditrade Capital
How do you protect your capital at a time like this? Do you sit tight and wait for the dust to settle or do you grab your opportunities right now and enter into lucrative names?
I think it is a very tricky situation and for somebody who is invested in the market, it is an extremely challenging situation. My suggestion will be if you are invested in good quality front line stocks which you had picked up with a specific thought, there is absolutely no need to panic and exit at this juncture.
How do you protect your capital at a time like this? Do you sit tight and wait for the dust to settle or do you grab your opportunities right now and enter into lucrative names?
I think it is a very tricky situation and for somebody who is invested in the market, it is an extremely challenging situation. My suggestion will be if you are invested in good quality front line stocks which you had picked up with a specific thought, there is absolutely no need to panic and exit at this juncture.
This is something which is created by external circumstances, nobody anticipated a war of this scale which has gone into 12th day already and no sign of it kind of cooling off. No analyst anywhere in the world predicted oil at $130, which we saw today. The rupee saw massive depreciation today and it touched 77. So I think this is a perfect storm. At this stage, exiting makes very little sense.
FIIs and funds are selling because they have their own compulsions and they need to meet redemption requests back home or from their own unit holders. But for a retail investor who is not leveraged, exiting at this stage does not make sense.
Coming to the question of building a portfolio, I will say do not catch the falling knife. But having said that, if you are sitting on liquidity and want to buy some stocks, there are probably excellent opportunities emerging in a few sectors. I would also be very careful in picking the sectors. I think the metals, oil and gas can be looked at. IT is another sector which can be looked at but for completely different reasons.
The geopolitical tensions of this unprecedented level will lead to some rethink on metals and mining and oil and gas. Now this is going to be there. Even after the war stops and things normalise, countries will take a hard look at their metals and oil and gas strategy. So, if a country or if a company is producing metals or pumping oil or gas, they become much more valuable and that value will continue in the foreseeable future.
So if you are planning to buy, do buy in these sectors. IT for the sheer reason that currency has depreciated. Yes RBI will intervene and there will be a kind of a stop to the rate of depreciation, but this depreciation or a part of it is going to stay and will definitely help IT companies which are majority exporters in a big way. So yes both these sectors can be looked at.
Would you like to get a little bit more specific on IT stocks? Where are you sensing the opportunity? Within the traditional IT names, what would be your pecking order – the likes of Infy, TCS, Tech Mahindra, HCL Tech?
HCL Tech has been on top of mind for some time. I think this company brings in a lot of strengths and among the names you mentioned, they are valued relatively less aggressively and so HCL Tech can definitely be picked up. With the corrections we have seen and the way rupee has depreciated now, I think even Infy, TCS look good. But if I have to pick one, I will pick HCL Tech for the long term.
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