Rakesh Jhunjhunwala Says 2018 Might Be The Year Of Consolidation

Rakesh Jhunjhunwala Tips & Portfolio

In step with Rakesh Jhunjhunwala, there's no credible leader inside the opposition party to take on PM Modi. I am sure that the next government will be a BJP government in spite of what people beings feel, he stated.

Indian equity market, which bottomed out in August 2013, noticed a stellar run in 2017 and in 2018 innitialy, boosting Nifty50 better to the touch 11,000-mark in 2018, however now it perhaps be in for a few consolidation, Rakesh Jhunjhunwala, associate, rare organizations stated in an different interview with CNBC-TV18.

We witnessed massive up move in markets and if the market remains within the variety of 10,000-11,000 for the next 1 year,I would be very happy, he added.

In his discussion with CNBC-TV18, he said that traders must now not get disheartened with the current correction. the bull market cannot end at the current level of profits-to-GDP. The flow of local money into equity markets has simply started and the flow is unlikely to stop anytime soon.

We might have lost about 7-8 percent from the highs but there is tremendous correction in the midcaps. I dont think political uncertainty will take down the market beyond a point, explains the big bull.

Commenting on political situation and its impact on markets, the big bull said that Modi is the most towering leader of this country and it would be too early to predict the outcome of the 2019 general elections.

Also, India or market is not dependent on any political party. The anecdotal proof propose that market generally unearths a few motive to upward push again. In 2004, while BJP lossed elections, marketplace went to 4,600 after which eventually it went to 25,000. I'm now not bothered too much approximately politics, explains Jhunjhunwala.

top Sectors & stocks in awareness:

Tata steel

He's extreamly bullish on Tata steel as he sees major upward rise in EBITDA (profits earlier than interest, tax, depreciation, and amortisation) if steel costs stay at modern-day levels.

Pharma

"I am pretty sure that worst is behind for pharma sector as generic competition in the US is leveling off," Jhunjhunwala stated.

He's positive on the home branded pharma business. "Indian pharma enterprise is coming into unknown, however thrilling area."

Healthcare majors sun Pharma & Lupin entered into speciality generics, the following next leg of growth.

Banking

He feels there's an exceptional boom opportunity within the banking section. "Once provisioning normalises for banks, earnings & multiples will expand. Banks with legacy problems will show strong growth," he said.

He is extraordinarily bullish on banks. "ICICI Bank carries characteristics of HDFC Bank in terms of CASA. For ICICI Bank, FY19 will see repair & FY20 will be a year of clean growth."

Return on assets and return on equity of private banks with legacy troubles will improve in FY19 & FY20, he feels.

Jhunjhunwala stated NCLT (National Company Law Tribunal) & IBC (Insolvency & Bankruptcy Code) will inculcate a sense of credit discipline. "people are underestimating lengthy-time period benefits of IBC & NCLT."

Healthcare Insurance

Jhunjhunwala is bullish on healthcare insurance in India. He sees numerous growth possibility in medical health insurance. "Healthcare coverage in India can grow 20 percent for the subsequent 10-15 years."

Real Estate

He sees great next 2-3 years for the real estate sector. "I don't think real estate prices will increase, but volumes will grow. We are underestimating the positive impact of affordable housing," he said.

Jhunjhunwala has some investments in the real estate sector.

Intake space

All the potential growth in consumption stocks is priced in, he said, adding over next 5 years, FMCG returns might be lower than FMCG earnings growth.