Even as the Indian government announced mega reforms to promote affordable housing and the PSU bank reform, Mahesh Nandurkar of CLSA says that he’s been bullish on these themes for some time now. In an interview to ET Now, Mahesh Nandurkar, India India Strategist, CLSA said, “One of the themes that we have been very positive on for some time now is the housing construction segment. What we sort of say is that over the last five years, the housing market has not really done anything. Both in volume terms and in value terms, the market has stayed flat and we feel that the housing sector is now at the tipping point and the improvement should be likely going forward because of two factors — the primary factor is the housing affordability measured as mortgaged payments to household income has gone down to an all-time low.” He believes that the government initiatives will spur growth in the sector. “There is the government effort to kickstart the housing sector. Both put together makes us very bullish and that obviously has the positive impact on a whole host of sectors. Housing finance is the obvious one,“ he told the channel.
Apart from housing, the expert is looking for picks in the banking space. “The second theme that we like quite a lot is the NPL cycle we feel has peaked out, and the government recap initiatives is only going to accelerate the NPL resolution, so the corporate oriented banks both on the private side and some of the leading public sector banks would be quite good on the back of that theme,” Mahesh Nandurkar said in the same interview. He also pointed out that FII interest seems to be coming back to India. “What I will say is that at this point in time, the interest seems to be coming back into India once again. One of the primary reasons I would say is growth is showing signs of bottoming out and we have also seen some of the important measures like bank recap which has been one of the key concerns for a variety of foreign investors,” noted the expert.
Just yesterday, Christopher Wood, Managing Director & Equity Strategist at CLSA said that If only he could, he would hold only Indian stocks in CLSAs Asia portfolio. “It’s dramatic how fund flows into Indian mutual fund industry have picked up ever since Mr Modi was elected. I’m three times overweight on India, because the benchmark emerging markets weighting for India is ridiculously low. I could very well have all 25 stocks in this portfolio in India,” Christopher Wood said in an interview to ET Now.