Noiseless Investing by Nilesh Shah — Kotak AMC

Nilesh Shah’s TV Interview Notes

Disclaimer — all the data is compiled from the publicly available info. I have not invested in Kotak PMS but I have invested in Kotak Mutual Funds. There might be some errors in data, please use your own discretion if you use any information in this article to invest money. This article is not paid and monetized whatsoever.

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Sectors which Nilesh Shah is bullish on Oct -Sept 2020:

• IT
• Contract Manufacturing. CDMO CRMO
• China to India Movement.

Nilesh Shah has an uncanny capability to cut through the noise and see where the economy is headed. I will try to document what he is seeing at a given point in time.

October 12, 2020

→ IT sector valuations are still very lucrative and long term upside is there.
→ Pharma and Chemicals are already very expensive.

Q. Specialty Chemicals and API — Is the juice still there?
A. Growth is still there. We will keep capturing the global market and the economics of scale will hit. But, a lot of positivity has been factored in. Now, will businesses deliver the promise that prices have factored in them is the question?

IT Sector.
Moved a lot already but the IT sector does not look expensive compared to Pharma. IT is where earning happens, so the juice is left in the IT sector.

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Oct 8, 2020

Higher Valued: Defense, Pharma, and to some extent IT
Low Valuations: Infrastructure

Now, Growth stocks are at a 52-W high, and value stocks are super cheap. So, we as a mutual fund, buy both and hoping that one of the strategies plays out.

Q. Where are we?
A. US elections may take a temporary hit in prices. India’s markets may also see a temporary correction in sympathy to the US market

India is the fastest-growing economy.

Q. What next, will the markets go up or will people book profits?
A. Every kind of people are there and everything will happen. But, it doesn't matter.

Q. Diagnostics Business.
A. Consolidation is happening in this industry. The most efficient player will win and kill all the small shops. ( This question was probably asked in the context of the latest run in Dr. Lal Path Labs stock price).
[ My personal views — Lal Path Labs is the winner in this space. Metropolis is a weaker player ]

Q. Are you betting on Urban Recovery?
A. I will bet on global movements rather than relying on India’s Urban.
China → India movement will benefit — Contract Manufacturing, Electronic Companies, Chemical, Textile & Garments.

Q. How do approach Banking?
A. We like opportunities in Insurance, AMC, and Broking. Amongst lenders, only good ones are able to raise Capital. Companies doing conservative lending will thrive.

Don’t focus where the buck has moved instead focus where the buck will move.