Near future imperfect, distant future super-perfect!

If you have the patience to sleep through the uncertain near term and enough wiggle room to play for the long run, here’s help.

Some of Dalal Street’s most active investors and fund managers on Wednesday said while the near-term challenges do make them worry about the prospects for the market, they see a bright picture hope, positivity and rapid growth in the not-too-distant future.

They brainstormed over long-term plays at a webinar, organized by ETNow, and each threw up names of potential stocks to play for the next 10 years.

Let’s figure out:

Manish Sonthalia, Motilal Oswal

• Safety is in the defensive portfolio right now. Higher leverage in balance sheets is going to be a killer going forward

• Healthcare and lifestyle are going to see major changes after Covid-19. Insurance is still underpenetrated in India. Earnings of HDFC Life can growth at 15 per cent CAGR over next 10 years

• The broking business is consolidating because compliance cost has become the biggest entry barrier. Volumes will increase in a big way over the next 10 years. It is a non-linear scalable business model.

• See 20 per cent profit CAGR for ICICI Securities going forward. Broking firms which are under the banking platforms have more trust factor after the Karvy episode. It may be the next Charles Schwab in the making

• Likes ITC and believes it is a deep value stock with a superior high quality franchise. ÏTC is free cash flow generating machine. The growth factor is going to be there. It is hard to believe that a company with 10 per cent growth have just about less than 15 P/E multiple.

Sandip Sabharwal, Independent Market Expert

• Consumption will remain a dominant theme in India over the next 10 years. Like Britannia and Havells. Britannia’s products are well accepted and it has strong balance sheet along with pricing power. As per capita income grows, branded food products with healthy connotations will grow rapidly.

• Havells can become a largecap in the next 3-5 years. The business has scaled up across segments and is creating brand power. Havells is a market leader in tech wiring segment in India and has become a strong consumer durables name over the last three years.

• Gold is going to be a high outperformer over the next 1-3 years as the kind of money printed globally is going to chase the yellow metal.

Vikas Khemani, Carnelian Capital Advisors

• ICICI Lombard has strong parentage, brand name, experienced leadership to augur well to capture growth. The shift of market share from public to private will further benefit the company. India has significant growth opportunity due to minuscule penetration of general insurance space.

• Aarti Industries is tech leader in Benzene chemistry. Efficient use of bi-products resulting in cost leadership. The company has been consistently delivering over the past 10-15 years. It is well-diversified and has a significant moat.

• Shift from China to India will further benefit this company. It has the potential to become $8-9 billion market cap company

• Eicher Motors is a phenomenal franchise with a strong balance sheet and run by a great management team. The will create significant wealth once the environment changes.

Pankaj Murarka, Renaissance Investment Managers

• Positive on Info Edge and Sun Pharma for the long run. Naukri, 99acres and Jeevansathi will deliver significant growth to Info Edge.

• Marriage is a $40 billion industry in India. It will keep on growing in double-digit for next 15-20 years. Optimistic about their business growth prospects. All the businesses are still in a very nascent stage and have potential.

• Sun Pharma can keep compounding 20 per cent earnings CAGR for next 5-7 years.

Vijay Kedia, Value Investor, Mumbai

• Zee Entertainment and Bajaj Auto for very short period. Zee’s investment in Sugarbox, if successful, will deliver big to the company

• Bought Bajaj Auto in the recent past. If there is a V-shaped recovery in the market, then the auto sector will follow the trend.

• If the government removes the lockdown soon then the recovery will first come in the two-wheeler segment. New launches and innovation to increase domestic market share. Strong balance sheet augurs well amid the near term demand slowdown

(Disclaimer: These experts may have interest or hold any of the above-mentioned stocks. Investors should do their own research before investing.)