Our preferred themes continue to be banking, IT and consumer. These sectors have various tailwinds in their favour and are likely to deliver decent absolute returns in FY20, said Naveen Kulkarni of Reliance Securities
Our Nifty target for this year is 12,000, but in an event of a favourable election outcome, our target is likely to move up, Naveen Kulkarni, Head of Research, Reliance Securities, said in an interview with Moneycontrol’s Kshitij Anand.
Q: At a time when D-Street is trading near its record highs, should investors be worried about global slowdown?
A: The global slowdown brings a set of mixed challenges and opportunities for India. The slowdown could mean that the commodity prices like crude are likely to be tepid which is positive for India, but the export market will be a challenge.
In an event of a global slowdown, India will be a preferred investment destination for global investors because India’s economy is driven by domestic consumption.
We believe that while there could be some challenges but at the same time there will also be opportunities for Indian investors.
Q: Where do you see Nifty in FY20?
A: Our Nifty target for December 2019 is 12,000, but in an event of a favourable election outcome, our target is likely to move up.
Q: Which theme is looking more promising: largecaps or mid and smallcaps?
A: Our preferred themes continue to be banking, IT and consumer. These sectors have various tailwinds in their favour and are likely to deliver decent absolute returns in FY20.
Q: What is your view on the currency for the next 6-12 months?
A: We believe the rupee will be stable in the range of 71-72 per US dollar for the next 12 months.
Q: Which sectors are likely to remain in limelight in FY20 in the backdrop of Lok Sabha election?
A: This could depend a lot on the election outcome. Consumer sector continues to be a focus because any government formed will continue to focus on the rural economy. However, if the current ruling party comes back to power then infrastructure is likely to do well.
Q: What are the factors that are likely to impact markets in FY20?
A: Eventually, equity markets are all about earnings and FY20 is expected to be a good year from a corporate earnings perspective with consensus expectations of 20 percent growth for the headline indices like Nifty or Sensex.
Apart from corporate earnings, government borrowing and fiscal discipline will be the key factors because that could have a significant impact on market liquidity.
Q: How is FY20 likely to pan out for investors and markets at large?
A: Overall, FY20 is likely to be a good year marked by healthy corporate earnings, and a stable interest rate scenario will help in recording decent equity returns for investors.
Q: Top five value stocks with one year horizon that investors can look at for FY20?
A: Here are our top five value picks for FY20:
ICICI Bank: Target Price: Rs 470
Infosys: Target Price: Rs 840
Larsen & Toubro: Target Price: Rs 1,763
JK Cement: Target Price: Rs 950
HG Infra: Target Price: Rs 405Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions