Post Covid, the strong will get stronger, says Shiv Puri


Post Covid, the strong will get stronger, says Shiv Puri&nbsp | &nbspPhoto Credit:&nbspBCCL

Key Highlights

  • Big distinction happening in markets between Covid-impacted & lockdown-impacted businesses
  • Financial services likely to emerge out of the Covid crisis as clear winners
  • Survival of a business and post-survival prospects, the two most crucial factors in investments now

Mumbai: Quality and survival prospects of a business are the two important factors that investors should focus on at the moment, according to the Founder & MD of TVF Capital Advisors, Shiv Puri. In a conversation with ET NOW, the fund manager expressed his preference for leaders of attractive sectors as they have better chances to emerge out of the Covid crisis with their credentials intact.

Covid has caused a lot of volatility in equity markets and uncertainty over demand outlook. But Puri insists that markets are in the middle of making an important distinction – the distinction between businesses impacted by Covid and the businesses that are impacted by the lockdown.

The other factor, according to Puri, is the necessity to look at sectors which have a long duration growth. But picking an attractive sector with strong chances of survival alone would not yield optimum results. Leaders of attractive sectors are likely to emerge stronger from the crisis and there would be a daylight’s difference between the leaders and the rest. The second strategy is to look specifically at individual companies and their balance sheets.

Is It Safe To Stick To Financial Services?

As the economy and the country gradually get unlocked, the spotlight has clearly shifted to banks. Will financials be a good bet? Shiv Puri is of the opinion that financial services is the heartbeat of any economy and over the next 3 to 5 years, financial services firms are likely to do extremely well. But there is a caveat. It will be only two or three high-quality banks and a couple of strong NBFCs that will emerge stronger, and that too, at the expense of peers.

What About MidCaps?

While Puri acknowledges the performance of several midcap companies over the last few years, he remains skeptical of their prospects over a five to 10 year period. In fact, he expects the midcap space to have fewer winners going forward not just in India, but also globally.

Watch Out For Tech Disruption

Puri has focussed on staying away from sectors that require huge capital outlay, but tech disruption is another crucial variable. Several sectors in manufacturing, infrastructure and retail space are facing unprecedented tech disruption and many of them may not be as dominant in future, in his opinion.

Demand Outlook?

Shiv Puri insists that there is no clarity on nature and the timeline of recovery in demand, but India is in a safer place than the rest of the world, as it is fundamentally not a saturated market yet.

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