Money manager Kenneth Andrade is happy that Indian companies aren't investing at the moment. His Old Bridge Capital Management has stopped accepting fresh money.
A pause has led corporate India to repair their balance sheets, which will prepare them to participate when growth returns, the chief investment officer of Old Bridge Capital said in the first episode of BloombergQuint’s new series Alpha Moguls.
And while a recovery in domestic growth may be a few quarters away, Indian manufacturing companies will gain from the global uptick, Andrade said.
Buying into leading players within a sector usually pays off because when the cycle turns, smaller companies tend to fall off quicker, he said. That doesn’t mean one shouldn’t invest in turnaround stories, or companies that are on the way to recovery, he said.
All that people would buy at a point of time in recovering sectors was not the sector but the valuations.Kenneth Andrade, CIO, Old Bridge Capital Management
A space that could favour investors in terms of valuations is information technology. Andrade is invested in a couple of mid-cap IT companies, but he doesn’t think large-cap IT stocks are doing badly. And while valuations may be in favour in pharma, Andrade is biding time.
He is also not sure if the government’s Rs 2.1 lakh crore recapitalisation plan for public sector banks will work for investors in all state-run lenders. The banks which can make business grow after the recapitalisation process is over will make investors money, he said.
He would prefer investing in manufacturing and services businesses, instead of lenders.
Watch the full interview here.