Market may see bull run in 2015-16: Axis Capital

Kashyap Pujara, ED- Midcaps Institutional Equity Research Axis Capital feels midcaps do well when the overall economy is growing.

"The boom gets widespread and all the companies end up benefiting. That is the time when one sees the discount or the premium to the large caps contract substantially. Wherein the midcaps really play a catch up with the large caps and there is virtually no discount, he said in an interview to CNBC-TV18. Also read: Sensex signs off FY13 with 130 pts rally; Punj Lloyd up 23% This has been the phase over the last so many years because on a broader side the Gross domestic product (GDP) growth has averaged close to 8 percent, he explained.  Indians are obsessed with owning physical assets like real estate or gold. However, over a longer period of time if one has held on to equities, then he has made more money. "In 1970’s in some of the top metropolitan cities per square feet real estates rates were in the range of Rs 500-700. Probably at this point in time we are seeing close to Rs 60,000-80,000 or even Rs 100,000. Even if one takes the top end of the band in terms of real estate price and the bottom end which was probably the rate in 1970’s and look at a 30-35 year compounding, it implies a 12-13 percent return. If one compares equities against it, it is higher, he elaborated. So, over a longer period of time, if one has invested in quality businesses then they have definitely given a far higher return than the physical assets. Pujara foresees a new bull run for the market in 2015-16. "Then one could bet on consumer discretionary - autos, consumer durables, banking and also to some extent, wherever there is certain regulatory related catalyst playing out like UID or direct transfer of cash. The impact it has on subsidies and companies in that space or probably land acquisition act, GST," he recommended. According to Pujara, investing is not difficult, it can be is easy if one follows the rules. "The biggest mistakes are made because of greed and fear. People are over pessimistic and under invested and completely defensive in bear markets like these, while they are completely optimistic and probably having a lot of F&O positions and leveraged in the peaks."