Do you think that the market will correct more or will the uptrend continue?
At first you were worried that bond yields of 1.74 is very bad. Now 1.3 seems bad because there is no growth. So let the people who have to decide, see that. There are bouts of profit booking. The dollar has strengthened, but commodities are in a very sweet spot.
The falling of bond yields globally is a very good sign for India and emerging markets. It means that the flows of funds are definitely back. For us, the inflation overhang is reducing and banks are very constructive. The growth momentum is there. Look at the numbers from Bajaj Twins – their growth and assets under management. Look at HDFC Bank commentary. Tata Steel is at a 10-year high. So India is in a very sweet spot.
I can thump the table and say that in this month, maybe after 17th, you will see a new high on the index. The real beauty has been midcaps. They have outperformed largecaps by miles and will continue to do so. So corporate India is in a sweet spot. Global volatility is a little bit of a see-saw, but this is the opportunity. Look for declines to buy. Maybe another 50-100 points (of correction) and we are done with it. I am looking at 16,000 by the middle or second half of July.
Give us your preference in largecaps as well as midcaps
Book profits across the broad in IT midcaps and get into midcap banks like Bandhan Bank, RBL and IDFC First Bank. These stocks are giving you a very good opportunity. Look at HDFC Bank. It has underperformed. HDFC Bank is through with all its issues regarding credit cards. It is back on the growth momentum. The cost of funds is minimum. So (go for) HDFC Bank among largecaps.
I am very bullish on Vedanta. I think they have turned around the cycle. I am very optimistic on Reliance at these prices, given that the tie-up with Saudi Aramco is a very big long-term play. They are encashing it. Reliance thinks 30 years ahead. The short-term aberration is because of the resumption of debt. It is just a slight overhang.
There is a lot of uncertainty on autos because of a comment from Tata Motors. Why don’t you read the fine print? They are saying that the demand is the highest they have seen in the history of the company. It is just a matter of a quarter. Japan or someone else will start supplying semiconductors. But locally Maruti and Hero MotoCorp are in a very sweet spot. July promises to be the best month for autos. Here I can also name one midcap NBFC which has one of the strongest presence in CV cycle — Cholamandalam Finance. The levels of Rs 515-518 are buy levels.
What kind of companies do you like in the real estate space?
Godrej Properties and DLF are two of the top holdings in our portfolios. I am extremely bullish on them. You cannot have gold at Rs 50,000 and equity (Sensex) at 53,000. Land prices are going to go through the roof for the next three years. The overhead inventory of a lot of erroneous builders is over. The big are getting bigger. So Godrej Property and DLF are going to make money in the next three years.
Did you take notice of the mega reshuffling of Cabinet? Does it have any bearing, directly or indirectly, on the market? A clutch of railway stocks are gaining smartly because the new man is being praised by the market.
No, I have put all my money on corporate India. The way we have faced the storm with our corporate and social abilities, thumbs up to corporate India. Zomato is the most chased after IPO. Look at the old ones – the Birlas, Tatas and Reliance – they have all contributed. So I am not looking at anything on the political side. If Apple and Amazon are $1.85 trillion, beware there are going to be 10 more 100 billion dollar companies from India in the next one year and I am putting my money there.
