Ramesh Damani, Nilesh Shah, others weigh in on post-election market outlook as Mumbai goes to vote

Most of the experts anticipate the BJP's return to power and foresee a continuation of policies

As India went to vote in phase 5 of the ongoing general elections on May 20, market doyens in the financial capital of Mumbai weighed in on how the markets may move after the election results.

Veteran investors including Ramesh Damani, Hiren Ved, Atul Suri, Nilesh Shah and Sridhar Sivaram, after casting their votes, shared their expectations and the sectors poised for continued growth. Many among them anticipate the BJP's return to power and foresee a continuation of policies that could uplift investor sentiment in the short term.

Ramesh Damani, veteran investor

Veteran investor Ramesh Damani expects policy continuity. “People always ask me what is the best time to invest in India. In 1991, when Manmohan Singh stepped up in the parliament and gave his benchmark liberalisation speech was the single best time, and the second best time to do so is tomorrow,” said Damani in an interview with CNBC-TV18.

He said the markets may continue to generate high returns if there is a continuation of economic policies. Damani said he hopes for some changes to the direct taxes to make it easier for people to file taxes.

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Damani noted the value creation in PSU stocks, saying that these stocks have gone from laggards to leaders, and from dust to diamonds under Prime Minister Narendra Modi’s leadership. “I think there'll be more action, particularly in that regard,” he added.

Infrastructure companies, housing, water, power, renewable energy, and electricity are among the sectors that will receive the government's attention for the next five years, said Damani.

Hiren Ved, Alchemy Capital Management

The market is very confident that the same NDA government will return. “The question is only how many seats they will get, but to me, that doesn't matter as long as they come back and continue with their policies with the same ferocity as before,” said Hiren Ved.

However, he noted that India needs to attract a lot of foreign capital, and make a better environment for investments, and encourage manufacturing.

Atul Suri, Marathon Trends PMS

Atul Suri noted that the markets are at a reasonable position, and are not overly euphoric. He said that while the election’s outcome will impact the market in the short term, the bigger picture is the ongoing global equity bull market. “With many global markets reaching lifetime highs, against this backdrop, I don't believe India will tank or underperform for a long period of time,” he said.

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“One must remember that in this bull market, India has leadership qualities. So I think if the outcome is good, there is a big chance for significant catch-up,” he added.

Nilesh Shah, MD & CEO, Kotak Asset Management Company

On the other hand, Nilesh Shah sounded a note of caution on the current high valuation. “When you are discounting everything positively, there is bound to be some jitters. Whether it's related to elections or something else, we don’t know, but we are one of the few markets which are still 1-2 percent below the all-time high and are trading at a maximum premium to other peers,” Shah said.

Sridhar Sivaram, Director of Enam Holdings

Sridhar Sivaram said that there is a high probability that the market will continue to grow at 14-15 percent CAGR, just like over the last five years, helped by the government reforms. “Hopefully, we'll see the benefits of that in the following years,” he said.

He noted that there are pockets where the market is over-exuberant and will see time or price correction. However, there will be very strong earnings growth in sectors such as capital goods, including pockets such as utilities. “We are very bullish on utilities as the government has focused on wind and solar energy, and government capital expenditure plans will benefit the sector,” Sivaram added.

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Regarding the recent foreign fund outflows, Sivaram noted that emerging markets have lost appeal due to poor returns over the last 10 years, and even 20 years. This has led to FII outflows from emerging markets, including India. However, he added that India will see some inflows once we see a stable government.

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