Enam's Sridhar Sivaram Picks Key Themes In Current Market
People are digesting now that there should be valuation sanity to any of the growth stocks, says Enam's Sridhar Sivaram.
Enam Holdings wasn't as euphoric as the market was entering 2022, according to Sridhar Sivaram. "IPO boom was there, things were all over the place," he said. "But we saw that macro was looking very challenging. Our view was protect capital for 2022."
The investment director at Enam Holdings told BQ Prime's Niraj Shah that has played out broadly. "India has done much better than what we'd have anticipated, given what has happened globally, especially emerging markets. Relatively, we've done extremely well."
Yet, he does not see a massive bull market for India.
"I don't think India can have an isolated bull market. We need building blocks around the world for that to happen. We may outperform again, but we're up about 3-4%, which isn't much to cheer about," he said. "If the global environment is good, India will have good opportunities going ahead. So we're treading very carefully."
Preferred Themes
Sivaram said value stocks have done better than growth. "Growth, at any price, has gotten decimated. People are digesting now that there should be valuation sanity to any of these growth stocks."
He is bullish on banks, with a special focus on those with a "good deposit franchisee".
"Credit costs are much lower than banks have anticipated, they have better profits now," he said. "We are bullish even on the public sector banks, not just private ones. Credit costs are benign, loan growth is good and valuation comfort is high."
Not just public sector banks, Sridhar said they are also looking at public sector companies in general. "We found them to be trading at extremely deep cyclical valuations."
In the defence segment, Sridhar said Enam Holdings is not limited to public sector companies. "The government has started to enforce the offset clause. Basically if an MNC has a large defence order from an Indian company, then 30% of that has to be manufactured in India," he said. "And a lot of transfer of technologies have also happened. So we're seeing many companies in that space."