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Kenneth Andrade On The Sectors To Bet On — Alpha Moguls


Markets will continue to struggle on account of macroeconomic factors, before they make a comeback in 2023, according to veteran investor Kenneth Andrade.

While the numbers will not go below the lows of 2020, the levels will drift sideways with a downward bias, declining around 10% in the worst case scenario, Andrade, founder and chief investment officer at Old Bridge Capital Management, told BQ Prime’s Niraj Shah

He advised investors to look at the textile exports space to wait for demand to recover. This season is over and they can crawl back in the next season on the back of healthy balance sheets, he said.

According to Andrade, the valuations framework is strong in the metals space, and it is also extremely competitive in terms of cost. Price stability for metal companies will be established once volumes show up, he said.

In terms of IT exports, Andrade expects the global meltdown to lead to a lot of information technology budget cuts, especially from clients like banks and companies funded by private equity. However, development work across governments and other companies broadly will not be part of this trend, he said.

Valuations in the space have become cheaper, with some large companies already trading at 5-6% dividend yields, he said.

Andrade expects any volume cuts in the sector to only last for a year.

The power sector, where the market expert sees capital expenditure happening in the near term, had a good cycle in 2021 and a tepid one in 2022, he said.

He expects “green shoots” to start appearing within a year, and he considers the space to be one of “the lowest hanging fruits” in the market.


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