The economy is in a state of flux with liquidity being tight and the presence of considerable pressure on NBFC, housing, power generation and telecom sectors, said Sandip Raichura of Prabhudas Lilladher
We don’t rule out negative market reaction to a third front government backed by Congress. A strong NDA government can result in Nifty moving towards 13,000 in the course of the year, Sandip Raichura, CEO Retail, and Distribution, Prabhudas Lilladher, said in an interview with Moneycontrol’s Kshitij Anand.
Edited excerpts:
Q: Where do you see Nifty heading after the election result?
A: The post-election scenario will depend on the government formed. We expect a strong market rally in case we have a strong NDA government or a UPA with strong congress as the core.
However, we don’t rule out negative market reaction to a third front government backed by Congress. A strong NDA government can result in Nifty moving towards 13,000 in the course of the year.
Q: What sectors will come into focus depending on different parties/alliances forming the government?
A: Domestic consumption will remain the cornerstone of investments in the Indian market. Consumption, select financials, oil marketing companies, and niche engineering companies remain the best bet in the market.
However, due to the bounty of Rs 3.6 lakh crore under NYAY scheme of Congress, there could be a spurt in consumption demand that can significantly re-rate staples, light electrical and durable companies, home improvement and mass retailers.
However, such a scenario will have a severe impact on the economy and crowd out capex and impact investment in the economy.
Q: As a new government takes centrestage, should investors look at select mid and smallcaps for the next five years?
A: The economy is in a state of flux with liquidity being tight and the presence of considerable pressure on NBFC, housing, power generation and telecom sectors. We believe that real pain in the economy will take time to subside and the market may remain skewed in favour of largecaps. We would advise being extremely selective in smallcaps now.
Q: What are your top six picks that investors can look at for the next five years?
A: We are positive on HDFC Bank, Britannia, Titan, Jubilant Food, IGL and L&T Technology for long term.
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