Mohit Nigam, Head - PMS at Hem Securities advises investors to remain invested in the bull market, albeit with occasional profit bookings.
"We believe identifying quality stocks (management track record, industry and company growth rate, capex plans, level of debt etc.) and sticking with them for the long term is the key to success in the markets," he said in an interview with Moneycontrol's Sunil Shankar Matkar.
Q: Can Nifty hit the 20,000 mark by the end of FY22?
We believe Nifty50 might hit 20,000 mark by FY22 end or even before. Some of the main reasons for continuation of this Bull Run includes dip in daily Covid 19 cases, record Covid vaccinations, better-than-expected earnings, and ample liquidity support.
Q: Is it the time to turn cautious and book profits or remain invested?
Investors should remain invested in this bull market with occasional profit bookings. We believe identifying quality stocks (management track record, industry and company growth rate, capex plans, level of debt etc.) and sticking with them for the long term is the key to success in the markets. In the long term, we are bullish on overall markets, however we may witness some consolidation at these levels.
Q: After dovish Fed commentary, foreign investors returned to India last week. Considering the US economic data and Fed action going ahead, do you think the FII flow will continue in the rest of financial year 2021-22?
After recent Fed commentary in which they indicated that Fed will push back tapering its bond purchases and keep its expansive policy for the near term, we can clearly see the FII flow into Indian equity markets. We believe this FII flow will continue in the short to medium term due to strong rebound in the Indian economy and better-than-expected quarterly earnings.
Q: New age investors continued to support the market in the absence of FII flow in August. What is your advise to these new age investors?
In this bull market tide, every new entrant feels like a winner but we believe that new entrants should not get carried away and pump money in equity markets rather these new age investors should pick and stick with quality stocks (with good fundamentals and growth visibility) for the long term.
Q: Realty stocks gained more than 12 percent in last two weeks. Is it the time to add these stocks in portfolio or better look at other sectors for investment?
In the past two weeks, the Nifty Realty index rallied 16 percent as against 6 percent rally in Nifty50 Index, being one of the top performing index as well as major contributor for fuelling the rally in markets. Individually, Prestige Estate rose 48 percent, Sobha by 44 percent and Oberoi Realty by 23 percent. So the leaders in the largecap space had taken charge or the ones that have been a bit of underperformers had managed to show signs of strength. This is a strong sign of a new uptrend beginning in this space.
The outlook for the sector looks much better than what it was a year ago and the main reasons to invest in this space includes: Increase in demand for housing, Lower interest rates and Good results by top companies.
Q: Which sectors can be looked at from a one-year perspective?
Sectors for long term investment:
IT Sector: Indian tech industry is aggressively hiring and the industry is expected to hire over 1,38,000 net new hires in this financial year 2021-22. The focus of government on Digital India will benefit the IT companies over the long term.
Infrastructure: In order to touch the $5 trillion mark and to promote 'Make in India', the country needs to ramp up infra spending in sectors like roads, irrigation, power, telecom and railways. Government is guiding for aggressive spending in these spaces, also structural changes in many businesses have made them more profitable. Many private players have also guided for a healthy and sustainable growth in coming years.
Renewables: Government is aggressively promoting various schemes in order to scale up renewable energy production. Target of achieving 300 GW of solar energy by 2030 is something the government is aiming to achieve with the help of several schemes and policies. Rise in rooftop and agricultural solarization, development of greenfield parks and demand of electric vehicles (EVs) are some of the reasons which are creating healthy demand prospects.Disclaimer: 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.