Bandhan AMC favours financial stocks and sees opportunities in healthcare companies, including contract development and manufacturing organisations (CDMOs), but remains underweight on information technology (IT) stocks amid concerns over growth visibility and valuations. Karthik Kumar, Senior Vice President at Bandhan AMC, outlined the fund house’s investment preferences in an interview with CNBC-TV18.
Within financials, the fund house likes private and public sector banks as well as capital market companies. It also favours select capital goods stocks and discretionary businesses, particularly in new-age fashion and gold jewellery.
Kumar said investors could selectively explore stocks after the recent market rebound, but a sustained rally would depend on a durable resolution to the conflict in the Middle East, normalisation of oil prices and a strong earnings season.
“I think these are good times to look at stock selection,” he said.
Why Bandhan AMC remains underweight on IT
Bandhan AMC wants greater visibility on revenue and an acceleration in growth before increasing its exposure to IT stocks. Kumar said valuations had become reasonable relative to the domestic market but remained somewhat expensive compared with global peers.
The fund house continues to hold select IT stocks but remains underweight on the sector.
CDMOs attract interest on earnings growth
Bandhan AMC has sizeable exposure to healthcare, including domestic healthcare companies and CDMO players. Kumar said these companies were seeing earnings upgrades, making them attractive investment opportunities amid geopolitical uncertainty and market volatility.
Drug pricing uncertainty weighs on hospital stocks
Bandhan AMC has very limited exposure to hospital stocks because of uncertainty over drug pricing policies.
Kumar said the fund house needed greater clarity on the policy, warning that its impact could be felt in earnings and, subsequently, valuation multiples. The fund house will wait for a final decision before reassessing its position.
Watch accompanying video for full conversation.
Financials, CDMOs or IT? Where Bandhan AMC sees investment opportunities