Soumendra Nath Lahiri, senior VP, Equities, at DSP Merrill Lynch, says that they have maximum midcap exposure to media and IT in Opportunities Fund. The company has increased exposure to Mastek and Deccan Chronicle, he adds.
He informs that the company has close to 5% cash level in TIGER and Opportunities Fund. Lahiri maintains underweight position in the oil sector.
According to him, the company has exposure in McNally Bharat, Sangam India, TV18 and midcap cements. The company also has exposure to KEC, Jyoti Structures, KEI Industries, Thermax and Siemens.
Excerpts of CNBC-TV18's exclusive interview with Soumendra Nath Lahiri:
How are you viewing the way the market has pulled back? As a fund manager, what have you been doing in the past few months?
We have been through a period where the markets have come back close to 30%. In the last couple of weeks, we have seen that midcaps and small caps have started to do well.
So post Q1 numbers, which were far better than what people expected in general, I think markets have been on a roll. There is no reason to believe otherwise; we have also seen a lot of FII flows turning positive during this phase.
So net-net, at this point, there is nothing much to worry at least on the domestic front, barring any event that could happen outside the country.
What kind of cash levels are you operating on specifically in TIGER Fund and Opportunities Fund, the two funds that you manage?
The cash levels at this point are close to 5%; that's the normal level that we maintain for redemptions, if any.
In the opportunities funds specifically, could you tell us about the kind of midcaps that you have bought in the last one-two months in your disclosed portfolio? Which are the ones that you have got maximum exposure to?
In the opportunities funds in the midcap space, we have increased our exposure to stocks in the media sector as well as some niche players in the IT space. One could have seen us increasing our exposure in stocks like Hexaware Technologies, Mastek and Deccan Chronicle. We also have some exposure to Television 18.
You have energy as well in both these funds, both in your TIGER Fund and Opportunities Fund. Would that include the oil marketing company universe or the standalone refineries?
In the oil marketing space, we have been pretty much underweight over the last 18-20 months. While signals have been positive in this area, we still continue to
I would think that unless and until we see crude really coming off and government taking steps to ensure that companies are able to improve the pricing scenario here, we would maintain our underweight position in this sector.
You have got big stocks like Reliance, BHEL, L&T among your top holdings in your TIGER Fund. Lower down in the midcap area, what are the stocks that you have included in that fund?
We have taken some exposure to companies like McNally Bharat, which is in the mining equipment space. We have taken some exposure to textile stocks like Sangam India. We do have good quantity of TV18 and Deccan Chronicle that we have added in this space. We have also added some of the midcap cement names like India Cements and Shree Cements.
Do you hold anything in the smaller construction stocks at this point?
We have been pretty much underweight vis-à-vis competition in the construction space because all the order books are very strong. We believe valuations are pretty much on the upper end of the band. However, post the quarterly numbers, we have re-aligned our portfolio to stocks, which have shown better numbers.
In this quarter, I think Nagarjuna Construction is one of the stocks, which has showed better numbers than the rest. We have also added stocks where we have seen order book improve with some amount of margin improvement.
Going forward, although order books have been strong, we will have to wait and watch and see companies, which have been able to get margin improvement along with better orders. So we are focussing on those kind of companies.
What is your top holding in TIGER Fund?
BHEL happens to be our top holding at this point of time.
In engineering and capital goods space, which are the non-Index stocks that you have?
Among the non-Index stocks, we have Apar Industries. Right through the chain of power equipment manufacturers, we have some weightage in the power transmission area; we have KEC and Jyoti Structures. We have KEI Industries, which is in the power cable space.
We have Thermax, which manufactures boilers and other allied power capital good equipments.
We also have Siemens. So that pretty much covers the entire power equipment space. So barring BHEL and L&T, we do have weightages pretty much across the board.
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