Focus On A Stock’s Fundamentals To Weather The Viral Storm, Marcellus’ Pramod Gubbi Says

For portfolio manager Pramod Gubbi, a company’s fundamentals are a key to pick up stocks. And that’s what investors should look at while deploying cash amid the market turmoil.

“Fundamental value doesn’t lie in the earnings of the business for a quarter or two, it literally is defined as the present value of cash flow to perpetuity,” the co-founder of Marcellus Investment Managers Pvt. Ltd., which managed assets worth Rs 1,153 crore in February, told BloombergQuint in an interview.

“There will be short-term earnings downgrade, recession around the globe but the focus should be on whether these events will have a bearing on the long-term fundamentals,” he said. “Assess the balance sheet, line of credit and if reputation is strong enough to weather the storm.”

This comes at a time Indian equities entered bear territory, tumbling more than 20 percent from their January peaks as the novel coronavirus outbreak threatens to stall economic growth. This comes even as the Asia’s third-largest economy is set to grow at its slowest pace in a decade. Foreign investors, too, have pulled out the most from domestic stocks since the 2013 taper tantrum.

Also Read: Manish Chokhani’s Advice For Investors On What They Can Do Amid Turmoil

According to Gubbi, foreign investors are not looking for an opportunity to invest now. He acknowledged that the market is expected to remain volatile. But investors, according to him, should put the money to work immediately if they find value.

“We are quite comfortable with the financial sector,” he said.

WATCH | Marcellus’ Pramod Gubbi On Coronavirus Impact On Markets