Sensex could see a 5-7% fall; 5 stocks which may give multibagger returns in 2-3 years

BSE

If there is quality and growth in a company, it will bounce back strongly so one should hold on to such stocks for the long-term, Rishi Kohli, MD -Pro Alpha Systems, said in an exclusive interview with Moneycontrol’s Kshitij Anand.

D-Street got caught up with global contagion post Budget. Do you see more pain before we some stability on D-Street?

Yes, there could be further pain in the market. The downside till 9900-10000 levels on Nifty looks highly probable

The impositions of LTCG was indeed a negative for investors but do you think that it can push investors away from equity markets? How much can the government garner from LTCG tax?

I do not think it will push investors away from equity markets as equities with the LTCG still remain the best long-term return generator among all asset classes for domestic investors.

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For foreign investors, it is not a big thing as they get tax set-off in their home countries so this is not an extra impact as such.

If someone from the US was paying zero tax in India, he was paying 30 percent tax in the US and now when he is paying 10 percent tax in India, he is paying the net difference so 20 percent in the US. So, his total tax outgo remains 30%. Only for countries with zero taxation, this will be an impact

The case of valuations does come across after such a move on D-Street. Do you see room for further downside and if yes then is there a case for a correction of 5%-10%?

Yes, there could be another 5-7% correction

Top five sectors which you think are a good buy even at current levels and why?

NBFC, FMCG, Construction, Fertilizers, Steel

Top 5 stocks which you think could turn multibaggers in the next 2-3 years?

BHEL, SAIL, Jain Irrigation, Sadbhav Engineering, and Symphony.

Plenty of mid & smallcap stocks got beaten 30-40% in a matter of days. What should investors do who have seen such erosion in their portfolio? Sit tight or book profit on rallies?

If there is quality and growth in a company, it will bounce back strongly so one should hold on to such stocks for the long-term. But if one invested on news or for a trading reason, then one must exit fast

Do you see FIIs adjust their trading strategy as Indian bourses move to stop feeding data to SGX?

SGX will not have a major impact according to me over time. However, the possibility that MSCI will not get feeds and therefore MSCI indices having Indian stocks will have problems is a more serious issue and India needs to resolve that fast

There are many investors who have suffered a big cut in their portfolio not just in direct equities but mutual funds thanks to global rout. What is your advice to them?

I am hoping most such investors invested with a 5-10 year horizon in mind! If that was the case, then there is no reason to panic and one should hold on for the target time horizon initially decided and then there is nothing to worry about as long-term objectives will still get fulfilled via equities as such declines are normal part and parcel of equity markets

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