"A 10 percent tax does not take away from any investment decision. A 10 percent vs 0 percent is nothing that bleeds my pocket. “I don’t see this as a technical ceiling,” said Dipen Sheth, Head-Institutional Research at HDFC Securities.
The earnings growth is still some quarters away but 10 percent tax on the long-term capital gains (LTCG) should not impact investment decisions of investors, Dipen Sheth, Head-Institutional Research at HDFC Securities said in an interview with CNBC-TV18.
There is some noise about mutual funds declaring a dividend ahead of the financial year given the fact that dividends are tax-free now and after 1st April the long-term capital gains tax will come in.
However, Sheth said a 10 percent tax does not take away from any investment decision. A 10 percent vs 0 percent is nothing that bleeds my pocket. “I don’t see this as a technical ceiling,” said Sheth.
Commenting on equity markets, Sheth said that equities were behaving like a debt and that has to give away. If we look back, for last 13-14 months, equities didn’t show much volatility.
Going forwards, even if nothing happens in this year, it wouldn’t surprise me if we look at the gains made in the previous year. “We are coming off from the crazy year of returns and this is the time when SIP wala’s will get tested for their patience,” he said.
“This is what SIPs are made for. Even if you go through a bad year or an indifferent year, investors should stay on course and keep doing your SIPs,” said Sheth.
Commenting on the sectors, Sheth said we can’t go long-term bear on IT and pharma reason being that both the sectors are run by quality management.
Large-cap IT has run up but midcap IT stocks hogged the limelight. The midcaps have pulled up large-cap in terms of re-rating.
In the pharma space, Cadila Healthcare is our top pharma pick. This is also one of the top largecap pharma company with no known regulatory worry, and a fat ANDA pipeline.Apart from IT and pharma, we have also identified a sub-sector in chemical space i.e the Amines sector. Balaji and Alkali remain attractive.