ICICI Prudential Manufacturing Fund is focused on harnessing the potential of the promising domestic growth story that is likely to unfold this decade. More than China+1, Anish says the real manufacturing growth will come from within – from urbanization, its resultant housing boom and its resultant growth across several allied sectors.
While valuations are no longer cheap, Anish remains confident about earnings growth in his preferred sectors. Earnings will drive stock performance more than re-rating from here on.
Anish has made aggressive active bets against sectors that are heavyweights in his fund’s benchmark (BSE Manufacturing Index) including FMCG and metals. He believes FMCG margins have peaked at 20 year highs. He believes metal companies will see volume growth but pricing may continue to be soft due to China’s lacklustre growth.
The fund’s recent performance was impacted negatively by a higher cash call. This has now been adequately addressed.
Anish is bullish on cement and auto segments – which directly play into the theme of growing affluence of the urban consumer.
He believes this fund – which does not have BFSI and IT sectors – is a better way to play the domestic growth story. BFSI is witnessing huge competitive pressures and may underperform the rest of the domestic growth sectors. If you want a pure play on domestic growth, this is a fund for you, says Anish.