As investors look to navigate the ongoing volatility compounded by uncertainty geopolitical situation and the conflict in the Middle East, Helios Capital's Samir Arora has advised not to buy into companies where the government operates as a big customer, largely on account of payment and project risks.
​"We don't want anything where government is a big customer. Defense you can say they are and we will give you some story for that, but broadly we mean these infra-type... we mean these infra-type companies where state governments are there and where you are on a low, you know, L1 bidding and where later on when the government changes somebody will say there was something wrong with this project and you don't get paid on time," Arora told NDTV Profit.
"I say jokingly that the biggest risk of an infra company is if it gets paid on time by the government or the state government," he added. "Because then they get very optimistic and double up, and then they don't get paid."
The Helios Mutual Fund founder went on to talk about other sectors, including capital goods and power. Samir Arora is particularly bullish on these sectors, admitting that he had been buying into power stocks as well.
"Rationale is that you know, these capital expenditure—private capex—a little bit more than data centers and power, and the world will need power. So all these stocks everybody has bought, we also have bought—how we don't know because we didn't know everybody else is buying and they didn't know that we were buying, but yeah, somehow everybody has converged on that as a normally good sector, yes," he said.
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As far as financials are concerned, Arora backed HDFC Bank amid the recent turmoil that saw the abrupt exit of Atanu Chakraborty. He dismissed chatter about the lender.
"HDFC Bank, we also added. And most of the fund managers if you broadly see did, whoever's number we can see... I don't believe that there was any ethics issue," he said.
​Conversely, Arora remains heavily bearish on the Information Technology sector, criticising management transparency and short-term visibility.
​"We are most negative on IT, and we think that is the big drag on the index and yeah, we have no trust in that. That's what I don't like about them, that they don't tell us what is happening in the next big picture this thing by saying 'We have orders for this quarter.' I don't like that," he concluded.
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