Investors should not lose sleep over noises in the market and instead should focus on the broader economic outlook and the performance of the companies that they decide to invest in, said Saurabh Mukherjea, Founder of Marcellus Investment Managers, in an interview with ET Now.
"If you get lost in this quarter, what happened last year, what is happening on liquidity flows, China recovery, the whole Adani piece... if you get lost in this sort of noise, you will never make any sensible investments in your life," said Mukherjea.
"We focus on what is happening in the broader economy and whether the companies we are investing in are showing profit growth; whether we are investing in the right companies and so on," Mukherjea said.
Mukherjea is optimistic about the economic outlook as he pointed out factors such as robust credit offtake, strong demand in the automobile sector and strong credit card spending.
"If I look at the economic picture, I see a pretty solid situation. Credit offtake continues to be robust. Auto demand is strong. Credit card spending is strong. Spending on holidays, hotels, and airlines is strong. The capital good cycle is recovering. Even the Western recession which was supposed to happen is nowhere in sight," said Mukherjea.
He, however, underscored that inflation is coming down at a very slow pace which could be because of strong demand in the post-Covid world.
"Both in the Western hemisphere and in India, the abatement of inflation is lower than expected. Part of the reason for that is even after a full year post-Covid, demand continues to be pretty strong," said Mukherjea.
Mukherjea added that even though the monetary boosts given by the Western governments and RBI have been removed, the demand environment remains surprisingly robust both in the West and in India. That is what is holding up inflation at the 6-6.5 percent mark.
Mukherjea believes the rate hike cycle is near its top while the demand environment remains good and the economic outlook remains bright.
"I do not think the rate rise cycle has too much further to go. It is probably reasonably close to the top. The demand environment is good, the economy is in a solid position and India's macro fundamentals are in decent shape," he told ET Now.
Mukherjea is bullish on TCS. He said TCS is his main play on IT. He is also positive about Infosys. Among the midcap IT stocks, he is positive on LTTS and Tata Elxsi.
“In the Consistent Compounders Portfolio, we hold TCS as one of our largest holdings. In some of our advisory portfolios which also had Infosys for the last six months, we are very happy with both those positions. In our midcap portfolio which is Rising Giants, we have LTTS and we recently added Tata Elxsi,” he said.
Disclaimer: This article is based on an ET Now interview. The views and recommendations given in this article are those of the analyst. These do not represent the views of MintGenie.
