Porinju Veliyath, CEO and MD of Equity Intelligence India, is certainly bullish on the prospects of domestic markets and predicts that the Nifty could touch 12,000 by next Onam (August 2018). That’s not all, he says that the investors could look at a return of 30-40% in the next one year. When asked about his take on Nifty by next Onam, the ace investor told BTVI, “Its very difficult to predict, because of saturated business in the composition of Nifty and Sensex. I used to predict it as there is no other way to make people bullish. Nifty can be 12,000; but investors can easily make 40% return.”
He also made it clear that the infrastructure space is slated to see unprecedented growth. In the same conversation he said, “Infrastructure is something I have been talking. The way government is envisaging projects, there are tremendous opportunities.” Highlighting the opportunities, he said, “We are too underdeveloped as an economy in the infrastructure space. We have 1,300 million people living in the country, but infrastructure is available only for 20%.”
He believes that there maybe a few L&Ts in the making. L&T has a market capitalisation of more than 1,64,000 crores. Porinju believes that currently, there are at least 2-3 large companies in the sector, which have the potential to reach the 1 lakh crores market capitalisation figure in the next decade.
Speaking about which companies are likely to make it, he said, “ Some companies are sure survivors. They are going to do really well, especially if the promoters are capable guys, and have got execution capabilities. A survivor balance sheet and execution capabilities, these are two key terms. Some infra companies can go 5, 10 and 20 times. There are many L&Ts to be made in that sector in India.”
The expert also shared his outlook for the hotel industry. “The hotels had a bad time in the last decade, I would say. They are now coming up. Companies like Indian Hotels or there are some mid-level companies like Royal Orchid. After decades of underperformance, some of these started moving. These are well-placed to create wealth in the next 5-6 years time.”
The Indian markets are set to raise Rs 1 lakh crore in the next 12 months, according to experts. Sharing his view on the buzz, he said, “ The new IPOs coming up and it’s going to be in the future also, are mostly quality companies which are very unlikely to cheat investors.” The expert pointed out that in the 80s and 90s, people lost faith in equities as many fraudulent companies entered the market. “Lot of investors are scared to invest in equity due to this IPO fraud in the 80s and 90s in India. Now that is changing. The regulators are very strict and companies are behaving more responsibly,” he said.