Reiterating his belief that investing into Sensex and Nifty could leave the investors disappointed, Porinju Veliyath says that select midcap and smallcap stocks can beat the benchmark many times over. In an interview to CNBC TV18, Porinju Veliyath said, “If you look at the Nifty and Sensex, you may make 8-10 percent CAGR for next five years’ time. If you buy the market, you may make 10-15 percent CAGR. If you pick stocks, you may make 25-30 percent CAGR for next five years or maybe 10 years’ time. However, very smart people out there who are looking at specific pockets of opportunities like turnarounds in the midcap and smallcap, they may end up making 40-45 and maybe 50 percent CAGR for a long time to come. So that is the kind of opportunity India is looking at now.”
In a recent interview to ET Now last week, Porinju Veliyath said, “ Those who have been index investor or following the Nifty and Sensex, have all the reasons to be disappointed in India because the big money is made outside. How many stocks have gone five times and 10 times in the last 365 days? Do you know that? A very large number. This is what I have been talking about in the last two years. Look at the midcaps and smallcaps in India where there is a turnaround potential.”
Porinju Veliyath said that infrastructure could be the next big wealth creation opportunity. “Infrastructure in India, it is going to witness manifold growth in the coming years. Lakhs of crores are going to be invested by the private sector and public sector, so there is going to be a big challenge for execution,” Porinju Veliyath observed. What are his top bests from the space?
“GVK, I bet because of the promoter capability and the execution capability of the company itself and the segments they are into, especially the airport infrastructure, creating airports,” said Porinju Veliyath. Apart from infrastructure, Porinju is also watching developments in the Tata Group companies closely.
“Many companies in Tata Group, investors may have a look at some of the underperformers in Tata Group. If it has happened because of the not so dynamic management from Tata’s, I think things are changing under Chandrasekaran, he is doing a wonderful a job, taking the CEOs and people into confidence and hands-on with almost every business in the group,” Porinju Veliyath said. Porinju is very positive in selective Tata Group stocks. “Tata Global Beverages has actually doubled in the last 6 months because there is a change happening at the group level. The company still has potential to create wealth,” he told the channel.