Most money with high conviction and concentration can be made in companies having a market-cap between Rs 1,500 crore and Rs 25,000 crore, and if growth is sustained and management is hungry and trustworthy, then markets price the stocks accordingly, Pritam Deuskar, Founder of Wealthyvia.com, said in an interview with Moneycontrol’s Kshitij Anand.
Edited excerpts:
Q) October was a stellar month. Both Sensex and Nifty closed with gains of about 4 percent each, while the broader markets underperformed. What led to the price action on D-Street?
A) Nifty and many stocks rose due to stellar earnings. Most sectors are showing recovery. Many companies have regained most of their earlier sales.
Q) Any important events to track in the coming week, and how will they impact Indian markets?
A) USA's elections is a prominent event being speculated globally. This time election is happening amidst such worse pandemic situation, unemployment, lockdown, and vaccine + stimulus await.
The US is a world leader of global stock markets. Though chances of democratic Candidate Joe Biden are higher which can cause higher stimulus (good for stocks) initially his stance on increasing corp n individual taxes are not yet decisively clear.
If Trump wins, the situation will remain similar. Biden is also against oil usage and supporter of renewable energy. Crude movement, black lives matter issue, and few other things on the ground are telling favour to Biden.
Whoever wins, low-Interest rates are currently irreversible and fiscal deficit is huge. Vaccine announcements and development are also clearly eagerly awaited by the markets as most are in phase 3.
Globally banks and financial may show come back as core and necessity sectors are showing comebacks. As most market indices are formed by heavyweights from technology, financial, pharma.
With online selling adaption by the companies in festival seasons, the trend can emerge stronger. Post this honeymoon presidential period, usually, markets have often gone up.
Q) From a technical perspective, what is your outlook on markets and important levels to track in the coming week?
A) 11700 sustenance is critical for upside and 10800 is crucial support if volatility comes. I feel improvement in financial can lead to rising of bank nifty and thereby nifty.
Disturbance can only come from non-decisive government, asset corrections, severe second lockdowns.
Q) Based on the October series expiry what are your expectations from the November series? Do you see Nifty50 reclaiming 12000-12400 levels?
A) Till 4th Nov, the market can be cautious and volatile. Post-election results, usually in next 10-15 days markets have usually rallied in history.
So, I think there can be a relief rally post-election with a very good Q3 corporate earnings season with a lower interest rate. Only in the case of mixed congress assembly, the stimulus can be averaged.
Any decisive government means a large stimulus package will be coming. It then matters of when and not whether.
Q) Small & midcaps underperformed in October. Do you think with the economy getting more stable, we could see some outperformance in November?
A) Most money with high conviction and concentration can be made in companies having market cap between 1500 cr to Rs 25,000 crore. If growth is sustained and management is hungry and trustworthy, then markets price the stocks accordingly.
We focus on individual company plans, growth, conduct, and the opportunities it has. Such companies can make wonderful growth in 2-3 years from now.
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