Chakri Lokapriya Suggests A Way To Put Money To Work Amid Market Rout

As volatility grips the Indian market amid the new coronavirus pandemic, TCG Asset Management's Chakri Lokapriya suggested staggering the investments.

“The market will see a huge amount of volatility but hopefully it will be on its way up over the next few months. So, staggering investments is the way to go. And where we put money to work is more bottom-picking,” the managing director at the asset manager told BloombergQuint in an interview. Lokapriya also intends to “incrementally nibble into auto and non-bank financial company space”.

Domestic equities tracked the worst global selloff in more than a decade as the Covid-19 outbreak upended economies and disrupted trade worldwide, forcing nations to seal their borders to curb the virus' spread. The indices, however, recovered some losses after the Reserve Bank of India and the central government announced relief measures. The Sensex and Nifty have gained more than 8 percent so far in April.

Here are other key highlights from the conversation:

• Banks continue to remain a favorite. Even if we assume the loan growth to fall down to very low levels and the gross non-performing assets go up by 30-40 percent in the next three-four quarters, adjusting for that the price-to-book valuation looks attractive.
• Reflection of the just concluded quarter results is not a reflection of what is going to happen over the next two quarters and it will see worse of results than previous quarters.
• Stocks reaction reflects that when all this dust settles, life insurance will be back to normal. But will stay back a bit when investing in insurance space as valuations for frontline banks and NBFCs look good, whereas valuations for insurers are not so cheap.
• One should buy into specialty chemicals. India has been a substitute as coronavirus has led to increased move by companies to diversify away from one country, China, to other countries. Top line accelerating due to higher volumes and moderation in cost due to lower oil price should help stock performance.
• Continue to buy pharma stocks as valuations are not expensive. All these companies will benefit as we go into next year through the work they are doing in finding a preventive or a combination therapy for coronavirus.
• Reliance industries Ltd. is a ‘buy' even at current levels because of the avenues of growth they have. The stock has lot more upside levels.
• Won't be a big buyer of Bharti Airtel Ltd. as the company still has a huge amount of debt.

Watch the full interview here: