Our long-term data analysis shows that elections really do not matter in the medium-term because irrespective of which party comes in, broadly, they all seem to be on the same page in terms of economic policy give or take a little bit here and there, said Lalit Nambiar, EVP & Fund Manager, UTI Mutual Fund, in an interview with ETNOW.
Edited excerpts:
Are fund managers even looking at aviation at all or is that primarily with retail investors? What is the outlook for this sector?
Given where India is in terms of its population and penetration levels, in terms of the new cities and the way India is travelling, aspiration levels as far as travel experience is concerned is clearly a great sector to be in.
You also have to consider the economics of running an airline which is probably quite different from the overall sales opportunity. There we can clearly see that some organisation and some companies have got it right and some others have gone very badly wrong. A very similar sort of framework will have to be applied when you are looking at investing in these companies.
In terms of what is running their efficiency levels, what is the driver behind this efficiency and who is most resilient under different business conditions, it is very high crude prices. How a particular airline responds, how it is laid out in terms of aircraft, policies and flight routes and the ones which have been a little bit more circumspect and a little bit more specific in terms of the risk they take and are more calibrated, have turned out to be doing well. Our focus will also be on companies which have shown that they have a sensible way of planning for the future.
We are in the thick of the earning season. It is early days yet but from what you have seen, do the early indications look good?
It is very early days. A couple of sectors have reported in and you cannot extrapolate that. Our sense is broadly it is going to be a little bit about the banks which did badly in the same time last year and which will post a turnaround. If you leave that out, I do not think there is anything very significant happening this earning season in terms of earnings growth.
We have to consider this because valuations are not looking extremely attractive. It is a slightly expensive space. It is only earnings which we can look at as a redeeming factor from a fundamental perspective.
From a sentiment perspective, our long-termRead More – Source
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