NEW DELHI: Seasoned investor Porinju Veliyath said he remains bullish on Indian market, but it is time to be careful and cautious.
In an exclusive interview with ETNOW, Veliyath, often referred to as the smallcap czar of Dalal Street, said there is a long way to go for equities in India, but investors need to be willing to accept corrections, and sometimes deep corrections, in markets.
Veliyath said one must learn from mistakes. He said he had two tough years (2018-19) in value investing, but mistakes happen even with the best of investment gurus.
“I was betting on certain aspects of the economy such as financial reforms like GST and RERA. It has really started playing now. It can be the biggest theme going forward. But I made a mistake playing the theme too early, which resulted in the big losses for my clients,” he said, adding that the culture/DNA of companies is very difficult to change.
Porinju said he has since turned extra-conscious on the margin of safety. “We have tweaked our investment strategy a bit, without compromising on the basic principles of value investing,” he said.
Porinju’s Equity Intelligence’s PMS delivered 153 per cent return in FY21. Veliyath said the biggest theme today is to buy proven businesses or blue chips at a premium, but he feels that the real opportunities lie in the broader market. He is betting on the formalisation and better compliance in the economy. He also likes digital transformation as a theme.
Veliyath likes PSU stocks. He also remains positive on Tata group stocks, as he feel N Chandra’s leadership is leading to positive changes in the group. He said
look under-priced and is a good play on the digitalisation theme.
He said Tata Communication is a great idea, too.
On metals and mining, Porinju said while he was aware of the ongoing rally, he does not see quality ideas in the sector. “Even if there are some value picks available, one has to be very choosy in stock picking. In fact, every sector is offering opportunities, but one needs not generalise sector-wise and be choosy,” he said.
Porinju said when there is a general trend of every stock going up, one should be extremely careful and cautious. We are at that kind of a point of time now and the leveraged investors should be very careful because whatever money made in the last one year or one and a half years can be lost very fast,” he said.
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