Infra Stocks Will Give Multibagger Gains - Best Buys

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Pee Vee
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Infra Stocks Will Give Multibagger Gains - Best Buys

Post by Pee Vee »

Any sector which has link with rural areas and financials can give good return to investors in the next two years. I believe infrastructure space will give multibagger return to investors in 5 year period.

How do you see midcap and smallcap stocks after the recent correction?

Midcap and smallcaps spaces are looking attractive after the recent sell-off. Demonetisation has caused small-term delay in consumption. However, it will not impact our long-term GDP growth. Mid and smallcap companies are highly correlated with growth of the country. We believe the economy will be on track in the second half of the year. It is a good time to pick quality midcap stocks for 3-5 year horizon.

What are the strategies you have adopted to benefit investors in the present market scenario?

We are applying rural transformational strategy across all our funds. After the Seventh Pay Commission Payout and good monsoon last year, we will see more demand coming from rural areas in coming months.

We also have a dedicated rural focussed fund called Rural India Fund. For investors, we believe this is a fund that can give robust return to investors with rural transformation. This fund has also outpaced markets with a return of over 20 per cent in the past one year.

The second sector which can play a crucial role is the financial sector. Banks, microfinance players, payment banks, insurance companies and asset management companies are set to explode in the next 3-5 years.

As more money comes in the hands of public, they will start banking more and borrowing more.

Consumer finance and insurance penetration is very low in India. Therefore, we can see robust growth from these sectors going forward. We are adding financial services companies in our portfolio to create wealth.

Can the rising income of rural India change market dynamics?

We have seen that when income of consumers rises in urban areas then only quantity of products picks up. But when income of individual rises in hinterland, then both quality and quantity improves. So, rise in rural incomes plays a crucial role for markets.

What are your expectations from the Union Budget?

I expect the Union Budget to be very economy-oriented. We should see the government focus on improving fiscal deficit and current account deficit targets. The government will come up with plans to spend more in the important areas like defence, rural roads, railways and focus on employment generation.

How do you see third quarter (Q3FY17) results of India Inc considering rise in crude oil prices and demonetisation?

Q3FY17 earnings will reveal the partial impact of the currency ban. Consumer goods, FMCG and consumer-discretionary will definitely report weak topline as well as bottomline numbers. Overall, Q3 results will again be a mixed bag for India Inc.

How do you see markets in terms of return after two years of flat return?

Of late, demonetisation and earnings had affected the valuations of domestic equity markets. Business cycles will return to normal in the next six months post remonetisation which is under way right now and earnings may see double digits growth in coming quarters.

For two years’ perspective, largecap and diversified funds will deliver decent returns, but we believe midcap and smallcap will continue to give superior returns in the long run.

Which sectors can give healthy return to investors in the present market scenario?

Any sector which has link with rural areas and financials can give good return to investors in the next two years. I believe infrastructure space will give multibagger return to investors in 5 year period.

And which sectors can disappoint investors?

For the very short term perspective, infrastructure will continue to disappoint investors because corporate capex has not started yet.

Foreign institutional investors (FIIs) are on a selling spree since October. Can we expect U-term from them in near future?

Expecting a U-term from FIIs in near term is difficult right now because of the rise in US interest rate and strengthening dollar. However, India will remain relatively attractive for FIIs. India will surely get huge share from foreigners among emerging economies in case of any buying in near term.

We expect the reasonable allocation to come in near future.

Why domestic institutional investors are buying when FIIs are selling?

Domestic institutional investors (DIIs) are buying for a couple for reasons. Firstly, DIIs believe that legitimate and good money are growing after demonetisation which is good for India and most of them are convinced with the growth story of the country. That’s why DIIs are pouring more money after demonetisation. Also, our industry is getting over Rs 4,000 crore monthly in terms of SIPs. We cannot keep this much of money as cash. Funds managers are mostly buying in quality stocks with 3-5 year outlook.

The other reason is that government has allowed PPF to invest up to 15 per cent of funds in equities. We believe the government will increase it to 20 per cent in coming months. So, there is a huge institutional money is also coming into the stock market.

In which funds your clients are investing right now?

Our clients are majorly investing Select Midcap and Rural India Fund. Both of these funds have given robust return to investors in the past few years.

Rural India Fund is getting a healthy share of inflows from investors.

Most recently, we have also seen a sharp uptick in our balanced funds. The category has started getting traction now because it is a combination of both debt and equity fund.

What is your advice to investors ahead of Q3 results and Union Budget?

One can also consider diversified funds to protect themselves from any uncertainty.

http://economictimes.indiatimes.com/mar ... 415137.cms
valuepicker
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Re: Infra Stocks Will Give Multibagger Gains - Best Buys

Post by valuepicker »

which are the picks in infra sector... Dolly khanna does not a single stock in infra. Porinju has j kumar, knr, sahyadri etc
Pee Vee
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Re: Infra Stocks Will Give Multibagger Gains - Best Buys

Post by Pee Vee »

valuepicker wrote:which are the picks in infra sector... Dolly khanna does not a single stock in infra. Porinju has j kumar, knr, sahyadri etc
I think Engineers India is good to look at. It is a PSU with good dividend yield, good management. Safety of capital is assured.

It is true that Dolly Khanna does not have any infra stocks in her portfolio, at least not those where the holding is in excess of 1%. Porinju Veliyath has recommended J Kumar Infra, IRB, KNR Construction, MBL Infra, Simplex Infra and Ashoka Buildcon etc.

Here is his article on the subject:

Would you be kind enough to build a five-stock portfolio that I can buy today, which can deliver me 25 per cent return at the end of 12 months?

I can give you 50 stocks instead of five. It is not about the number of stocks. If you see the last two-three years, anybody picking stocks with some extra smartness or knowledge,

I think they are doing very well despite the Nifty going below 7,000 or so. I am very confident about infrastructure because the new government has done a wonderful job in reviving certain industries. You will see unprecedented orders from the government in the next two-three or even 5-10 years.

But at the same time what has happened is there has been a major challenge in picking stocks in that sector as many companies are doubtful about their survival and their balance sheets are stretched.

Some good companies are richly valued in the market and priced at only one-tenth of the real market capitalisation we can build up in the next 10-12 years. So, L&T is a bit richly priced.

For, those who want to play it very safe for 25 per cent compounding growth for next few years, I think L&T is the number one pick. Some of the multi-baggers in two-three years time can be IRB infrastructure, Simplex Infra and Ashoka Buildcon.


http://www.thehindubusinessline.com/mar ... 352927.ece
valuepicker
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Re: Infra Stocks Will Give Multibagger Gains - Best Buys

Post by valuepicker »

Why MBL infra tanked and again hitting circuit breaker? Is it a bargain hun at current levels?
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Ravi
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Re: Infra Stocks Will Give Multibagger Gains - Best Buys

Post by Ravi »

valuepicker wrote:Why MBL infra tanked and again hitting circuit breaker? Is it a bargain hun at current levels?
Very volatile stock. It is in UC now. Heavy pledging by the promoter. Operational loss. May be a speculative bet but not an investment grade stock.
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