Midcaps still have some steam; bullish on Mindtree: HDFC

Sonia: And everyone wants that drastic change.

A: The thing is what is the change that we want and is it just X instead of Y, is it a better quality of discourse with regards to governance, with regard to business policy, with regard to how to run this country?

The noises that are emanating have finally begun to get much more constructive rather than vicious. I suspect that as we approach elections, people will take sides and lash out at each other but there is universal recognition of the fact that things have to change and change drastically and in ways that they haven’t changed before.

All this sounds very abstract but the thing is that for business to work effectively in this country, for economic growth to come back and for the investment cycle to revive this is needed. I am not flying a kite here. I am talking about hardcore nuts and bolts. I would want that whoever the next government is and it could well be this one, it could be another one and so on will have to reset the agenda and the discourse for that agenda has begun now.

A lot of detailed, drilled down questions are being asked about how will we run the economy with respect monetary policy, licensing, power sector, labour laws, land laws and so on. I must admit at the risk of sounding like an agent for the Aam Aadmi Party (AAP) that the entry of this party has improved the quality of the discourse. I am not their fan nor am I their enemy and I don’t think this is a medium to take sides. It is important that the contribution of this party has been spectacular in so far as improving the discourse is concerned and that is a very constructive thing to have happened.

Latha: What is it for those who are wanting to manage their money? How should they approach markets, do you bet that earnings cycle at least will see more upgrades in the months to come?

A: Inevitably the earnings cycle will see an upgrade driven by stronger and more confident prospects for revival in the economic growth trajectory of the country which will in turn be driven by the revival of the investment cycle. Whatever new government comes to power I dare say that even if a third or a fourth or an nth front government were to come to power there is universal recognition that the investment cycle needs to be revived. Will it happen in six months or a year? No, it will take two to three years for the healing to play out. The stock markets will fortunately or unfortunately react immediately and that’s where the opportunity is going to be.

Latha: You mean if there is a little bit of uncertainty after the elections that would be a time to buy?

A: I am saying there is uncertainty even now and this is the time buy. This is the time to stack up your bets. A few days ago on your program I said that if you can’t figure out what to do, which is actually where I am coming from right now, you do a little bit of diversification and hedge on both sides. So, there are some stories which do well despite what India is. So, whether it is an IT, pharma or a consumer space and so on – FMCG looks a tad overvalued right now bit it doesn’t matter.

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