'Smart stock pickers can make 50-100% return in FY18': 5 stocks Porinju is positive on
There is a huge opportunity for stock pickers and smart entrepreneurs for the next two years but at the same time investors should remain conservative and be choosy.
The Nifty which rose by about 18 percent in the financial year 2017 could well deliver another 15-20 percent return in FY18 while smart stock pickers can make anywhere between 50-100 percent return in the same period, Porinju Veliyath, MD & Portfolio Manager, Equity Intelligence India said in an interview with CNBC TV-18.
One major factor which is favouring Indian markets is the political climate which is slowly changing. Political leaders are taking hard decisions which will go a long way for the markets and domestic fund flows will surprise everyone.
“India is going through very exciting times. We are entering a new era of economic development. The way politicians are managing the economy, the way the corporate world is taking shape and the way disruptive growth is happening is all unprecedented. We have never seen such a situation before,” said Veliyath.
In the last 12 months, Nifty did well but the smallcap stock pickers made 100 percent return in the last one year. Going into FY2018, Porinju feels Nifty could well give 15-20 per cent growth in the Nifty and smart stock pickers can make 50-100 percent in the same period.
There is a huge opportunity for stock pickers and smart entrepreneurs for the next two years but at the same time investors should remain conservative and be choosy. Not all smallcap stocks are buys and not to forget WhatsApp is the biggest villain.
Investors usually look at stocks which are trading at a record high but Porinju has a different approach. He looks at stocks which are trading at 1-year low or multi-year lows.
“Many of the small and midcap stocks are going to grow very big in the next 2 years. People always fancy names, but it is time to look beyond because we have more and enough choice with respect to picking stocks,” he said.
We have collated a list of stocks in which Porinju is positive on from his interview with CNBC-Tv18:
Selan Exploration:
Porinju recently added Selan into his portfolio which in fact eroded wealth for investors. Selan was trading at 10-year lows, he said. With oil prices trading at these levels, Selan is a beautiful company with cash on the balance sheet.
Orient Cement & HSIL:
HSIL is a very large company, but it is not in fancy. It is not a great performer but carries huge relevance going forward, explains Porinju.
The government is expected to go big guns in housing. The government is developing many schemes such as housing for all, Mission 2022. “Our economy structurally is so strong that we can do these things and luckily for us, Indian politicians are taking hard decisions,” said Porinju.
Reliance Industries:
It will be difficult to quantify how much more RIL can grow from here, but it could well keep giving returns to investors for half a century, said Porinju.
(Disclosure: Network 18, which publishes moneycontrol.com, is a part of the Reliance Group.)
Kotak Mahindra Bank:
Kotak Bank has the potential to grow up to $100 billion market cap in the next 10 years in the backdrop of the given economic environment. “We have to understand that the structure of the Indian economy and demography structure are pointing towards smart entrepreneurs and relevant business,” said Porinju.
“There is a huge potential for such businesses to grow compounded at 15-25 per cent annually for the next 10-20 years. That is kind of inflection points of our economy we are sitting on,” he explains.
Happy Investing
The Nifty which rose by about 18 percent in the financial year 2017 could well deliver another 15-20 percent return in FY18 while smart stock pickers can make anywhere between 50-100 percent return in the same period, Porinju Veliyath, MD & Portfolio Manager, Equity Intelligence India said in an interview with CNBC TV-18.
One major factor which is favouring Indian markets is the political climate which is slowly changing. Political leaders are taking hard decisions which will go a long way for the markets and domestic fund flows will surprise everyone.
“India is going through very exciting times. We are entering a new era of economic development. The way politicians are managing the economy, the way the corporate world is taking shape and the way disruptive growth is happening is all unprecedented. We have never seen such a situation before,” said Veliyath.
In the last 12 months, Nifty did well but the smallcap stock pickers made 100 percent return in the last one year. Going into FY2018, Porinju feels Nifty could well give 15-20 per cent growth in the Nifty and smart stock pickers can make 50-100 percent in the same period.
There is a huge opportunity for stock pickers and smart entrepreneurs for the next two years but at the same time investors should remain conservative and be choosy. Not all smallcap stocks are buys and not to forget WhatsApp is the biggest villain.
Investors usually look at stocks which are trading at a record high but Porinju has a different approach. He looks at stocks which are trading at 1-year low or multi-year lows.
“Many of the small and midcap stocks are going to grow very big in the next 2 years. People always fancy names, but it is time to look beyond because we have more and enough choice with respect to picking stocks,” he said.
We have collated a list of stocks in which Porinju is positive on from his interview with CNBC-Tv18:
Selan Exploration:
Porinju recently added Selan into his portfolio which in fact eroded wealth for investors. Selan was trading at 10-year lows, he said. With oil prices trading at these levels, Selan is a beautiful company with cash on the balance sheet.
Orient Cement & HSIL:
HSIL is a very large company, but it is not in fancy. It is not a great performer but carries huge relevance going forward, explains Porinju.
The government is expected to go big guns in housing. The government is developing many schemes such as housing for all, Mission 2022. “Our economy structurally is so strong that we can do these things and luckily for us, Indian politicians are taking hard decisions,” said Porinju.
Reliance Industries:
It will be difficult to quantify how much more RIL can grow from here, but it could well keep giving returns to investors for half a century, said Porinju.
(Disclosure: Network 18, which publishes moneycontrol.com, is a part of the Reliance Group.)
Kotak Mahindra Bank:
Kotak Bank has the potential to grow up to $100 billion market cap in the next 10 years in the backdrop of the given economic environment. “We have to understand that the structure of the Indian economy and demography structure are pointing towards smart entrepreneurs and relevant business,” said Porinju.
“There is a huge potential for such businesses to grow compounded at 15-25 per cent annually for the next 10-20 years. That is kind of inflection points of our economy we are sitting on,” he explains.
Happy Investing
Source: Moneycontrol.com
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