Porinju Veliyath bullish on infrastructure space

Porinju Veliyath, MD & Portfolio Manager, Equity Intelligence India told CNBC-TV18, "I was surprised the way market irrationally reacts to some silly news. This happened in J Kumar Infraprojects. The stock was trading at around Rs 220 kind of levels. It went down to Rs 105 in no time. On some political allegation or they were banned by BMC kind of thing which was already there in the domain. So, when a political party made an allegation, the stock price from Rs 220, it went to Rs 105 in a few days. And the same stock has come up, now it is around Rs 175-178, it has moved up from Rs 105 to Rs 178 in another few days. This is the kind of volatility which is basically huge opportunities for smart investors to pick stocks."He further added, "MBL Infrastructures had a pledge issue, some finance minister from the pledge, they sold off the shares in the market. So, from Rs 120, MBL went down to Rs 62 in a few days and today it is Rs 111 back, back to square one in another few days. These are big companies and J Kumar is a very strong balance sheet company and with a huge execution capabilities, now their order book is going up in a big way.""They have got the big order from the Mumbai metro. So, I am basically very bullish on the sector. The stock picking is a big challenge, but when some kind of bad news, investors should take the advantage of the opportunity.""There are many such things maybe further in the offing because if you see in the last few decades, these companies always, they had a responsibility to manage the politicians by bribing. That was India’s norm of infrastructure. Without bribing, you would not have got any orders. MaybeLarsen and Toubro, there could be two, few companies which are differently being run. But otherwise, it was a norm in the Indian market. So, these are not a very big news. Somebody bribed and then he was caught later. It is okay. So, these things you have to live with, but things are changing for the future. In the future these infrastructure companies will be run very professionally.""The government involvement will come down, there will be more transparency and the arbitrage thing which I talked, one year ago which has recently started being in the public, the benefit of these companies. There is no five year, ten year arbitrage kind of cases going on. They will get settled in one year time. These are very positive things happening in the infrastructure industry and unprecedented potential orders going to come from railways, from roads and from other infrastructure, everywhere, from the national waterways.""I am telling this is a huge opportunity market, is not really looking at. Market is looking for numbers. And by the time numbers start coming in, the smart investors make their money five times and 10 times, that always happens. So, this is an inflection point for infrastructure companies, but be very selective," he said.