'We are close to bottom but ...': Dinshaw Irani of Helios Capital on stock market

Dinshaw Irani of Helios Capital on Monday said that the market may be approaching the bottom but advised to maintain caution. "Our heart tells us that we are somewhere close to the bottom but the head tells us to be a bit more cautious in that view. We are selectively picking up stocks where we believe the valuations are in our comfort zone. Ultimately, the market is going to respect valuations and valuations have to be supported by the earnings growth and that is where we are trying to redeploy the money as such," the market expert told Business Today.

Commenting on the recent rejig in Helios' portfolio, Irani said the capital management firm has exited IT stocks, barring one. "We did exit a few of the platform companies too," he added.

In terms of valuations, the market veteran finds a few large-cap banks "reasonably valued" at current levels. "Banks are definitely a screaming buy as of now. Look at the valuations, these are fairly and reasonably valued. The fact that they've not at all performed in this whole rally that the market went through till September of last year itself shows you that they're right to support the markets."

From the banking space, he sees HDFC Bank Ltd, ICICI Bank Ltd and Kotak Mahindra Bank Ltd as quality stocks. However, Irani underscored that there are certain banks within the private sector which he will be avoiding.

Sharing the market outlook, Irani said, "Our feel is that for the next couple of quarters, stock picking will come into play. The first preference today is large caps but when things stabilise, it'll be the mid- and small-caps which will provide turnaround returns to all the investors.

If investors are looking for a fresh market entry, he advised them to start nibbling at present rather than deploying the whole money and staggering it further over a couple of quarters.