Expect some policy support for auto sector: Taher Badshah

Taher Badshah, CIO-Equities at Invesco Mutual Fund, shared his stock picks and investment preferences in an interview with CNBC-TV18.

"We know that there could be some downside to the current markets but we are driven by our own individual fund related mandates and wherever we are finding opportunities we are willing to add," Badshah said, adding that gradually there would be more value coming into the market and they would be happy to exploit that.

According to him, "It is difficult to say if we are done through the course of correction that we are undergoing right now. It would be government policy action and measures to support the economy that would decide that."

Talking about the EPS growth estimates, he said that they have toned down the expectations from 15-20 percent range to 10-15 percent range.

Sector specific, he said: "If the auto sector did not get any policy support, then it would be the demand-supply situation that would have to work out for itself which would take some time. The industry will have to work through inventory through the system."

"One should also brace for a different landscape of autos over next 3-5 years given the government’s intention to push electric vehicles and so one will have to tread differently in autos than earlier," he said.

"Some of the sectors that are still showing a decent pocket of growth are low ticket items, the bottom of the pyramid – things like apparel, footwear, home improvement sectors but large ticket items are taking a bigger knock. There is a combination of value and growth also visible in utility space – gas, power utilities," said Badshah.

When asked about Reliance Industries, he said that they have been holding the stock for over two-two and half years and see value in both sides of businesses.

Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.

Source: CNBC-TV18