The Indian market is rallying on optimism, which makes finding value stocks with reasonable valuations is a little difficult, but the long-term trend still remains to be on the upside, Arvind Sanger, Managing Partner, Geosphere Capital said in an interview with CNBC-TV18 on the sidelines of Morgan Stanley Investor Summit.
The Nifty which made a fresh record high this week is on track to hit 11,000 in the next 12-18 months backed by the earnings growth of 15 percent in FY18 and stable macro fundamentals, said Sanger.
Another factor which supports the optimism is a stable political environment. Although India will go to polls in the year 2019, investors are comfortable that political uncertainty looks much less.
Commenting on the midcap space, Sanger said that there will be a lot of opportunities that will roll out once GST gets implemented. The transition will not be that smooth for at least one or two quarters.
“We are keeping an eye on companies which might get hurt in GST roll out but are still good long term plays. There will be some opportunities where the organised sector will benefit from medium to long-term basis where there could be some dislocation,” said Sanger.
Speaking on the pharma sector, Sanger said that we stay away from Indian pharma names unless it is a special situation.
“However, we are more interested in some of the chemical companies which are plays on CRAMS (contract research & manufacturing service), or agro chem, but not in the pharma space,” he said.In the agrochem space, we like UPL. Indian chemical companies can be big winners in the CRAMS space such as Navin Fluorine.