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India to add another trillion in next 12 months says Hemang Jani of Motilal Oswal; picks 12 stocks to buy

Risk appetite is back and broader markets tend to do well in such a phase. It would be advisable to put some cap towards mid and small caps and do some filter check on the companies to avoid major drawdown risk, said Jani.

May 28, 2021 / 12:39 PM IST

Market capitalisation is just a number and I would be surprised if this (mcap at $4 trillion) doesn’t happen within the next 12 months as there is a strong revival in the economy and corporate sector along with global tailwinds, which should get reflected in the stronger market cap, Hemang Jani, Head Equity Strategist, Broking & Distribution, Motilal Oswal Financial Services, said in an interview with Moneycontrol’s Kshitij Anand.

Q) How was your journey as Mcap hits $3 trillion?

A) I got influenced towards the stock market for the first time, when BSE Sensex touched 1,000 in July 1990. I was pursuing my CA at that time.

I started out my investment journey with a few IPOs and buying some stocks through sub-brokers on the BSE. We used to get the confirmation of trades done in the evening via the fax machine.

I still remember reading the bhav copy in the evening to track the prices of stocks.

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Q) How did you fell in love with D-Street? Your first trades and subsequent lessons?

A) I got the opportunity to work with a renowned portfolio manager as a trainee in 1993 in Ahmedabad. We used to read different financial newspapers to track the companies and keep them in a plastic folder along with its annual report for reference.

My most memorable part of the investment career was the first call that I made to the then CFO of Infosys Mr Mohandas Pai to get a copy of the Annual Report.

My boss was highly impressed with its business model, disclosure, and financials. He was so convinced about the prospects of Infosys that this was the largest holding of all the clients managed by him.

The key lesson was that initial screening and subsequent process holds the key rather than getting excited about daily stock moves.

Q) When do you foresee 4 trillon for Indian bourses?

A) It is just a number and I would be surprised if this doesn’t happen within the next 12 months. There is a strong revival in the economy and corporate sector along with global tailwinds, which should get reflected in the stronger market cap.

Q) In terms of valuations -- Nifty 12M fwd P/E at 10% premium to the long-term average. Does it suggest caution or do you think with earnings likely to play catch up, these valuations could stay?

A) What matters is the trajectory of earnings growth, rather than the PE ratio. After strong upgrades in Q2 and Q3, there has been some moderation in earnings growth in Q4 and outlook, mainly due to lockdowns.

As long as earnings catch up over the next few months and the global backdrop remains strong, the market should make new highs.

Q) Small & Midcaps seems to be hogging the limelight – what should be the strategy?

A) Mid-caps and small caps have outperformed Nifty & Sensex comprehensively on a year-to-date (YTD) basis. The Nifty is up 10%, Midcap index is up 20% and the small-cap index is up 28%.

Risk appetite is back and broader markets tend to do well in such a phase. It would be advisable to put some cap towards mid and small caps and do some filter check on the companies to avoid major drawdown risk.

Q) Any top stocks which investors can buy as market inch towards life highs?

A) Here is a list of stocks from the large and midcap space -

Large Caps – Infosys, ICICI Bank, SBI, Maruti Suzuki, UltraTech Cement, Titan Company, Divis Laboratories.

MidCaps – Gujarat Gas, Varun Beverages, Orient Electric, Solara Active, and Gland Pharma.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Kshitij Anand is the Editor Markets at Moneycontrol.

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