Where to nibble as market corrects 8%: Sudip Bandyopadhyay

“If you have been wanting to buy some good stocks and they have corrected 7%, 8%, 10%, it is worthwhile to start nibbling into those and start buying the good quality stocks to build your portfolios,” says Sudip Bandyopadhyay, Chairman, Inditrade Capital.



A near about 8% fall already from the top. Are you tempted to buy just yet?
This correction was probably on the cusp for quite some time. Market probably was looking for a reason for correction. We all have been talking about valuations and where the markets will go from there on. The new strain of virus gives the market an excuse for the correction. Remember FPIs were selling even before this virus scare, but their selling combined with the panic all around with the virus variant emerging, led to this correction.

It became acute but having said that, assuming for a minute that this virus does not do too much damage and there is no major disruption to economic activity, then this is a good opportunity for buying. Now having said that, should one rush to buy immediately and put all their money to work now? My thought will be that if you have been wanting to buy some good stocks and they have corrected 7%, 8%, 10%, it is worthwhile to start nibbling into those and start buying the good quality stocks to build your portfolios.

So whether it is the frontline banks or the frontline FMCG companies or even cement and some of the infra names and some of the tech companies, these are the sectors one can look at and start nibbling into. Do not put all your money to work immediately but start nibbling.

Would you be stock specific in your buying approach or is it going to be market cap agnostic given that broader markets have seen a sharper cool off and the most hard hit has been the specialty chemical space?
I have been believing in a stock specific approach for a very long time now. The market started going up from April-May 2020 and the way the market moved up, there was a need for caution on the valuation front. Stock specific is definitely the way forward also. There are values in multiple pockets but even those needed to be stock specific.

As for specialty chemicals, that is a fantastic sector that could benefit from China plus one strategy and Indian manufacturing benefits which they are going to get going forward. But having said that, the valuations had reached astronomical levels and some amount of corrections were warranted. I will not rush to buy the chemicals immediately but there are other sectors and pockets like cement, IT and banking. BFSI is down for quite some time but there are still opportunities in these pockets.

What is your call on the Star Health IPO?
We are extremely bullish on the entire insurance sector. Star Health has been one of the leaders in this healthcare space and this is one sector which has got a significant tailwind consequent upon this pandemic and we believe that this is going to continue well in the future. They have been showing about 30% plus growth over the last four-five years and this trend can continue in the foreseeable future.

I have no hesitation in recommending a buy in Star Health. I am not talking about flipping on listings and things like that. I am talking about a long-term investor, I am talking about somebody who is building his portfolio for him or her. It is a good IPO to subscribe to and I would like to wish them luck for allotment as well.