'Pick stocks with long-term growth potential'

What would your contribution be to Smart Portfolios Season III?
I believe this is an excellent opportunity for us to enlighten investors about the sectors/stocks where we see strong earnings growth. My contribution would be to give investors good-quality stocks for trading/investment.

What is your investment strategy, and which stocks or sectors will you focus on for the next one year?
My philosophy is investing in companies and sectors that have great business opportunities, good management and high cash-flow generation. However, I will also play on themes that can provide returns in a short time frame. Therefore, I have divided my portfolio into the short and long terms. I will largely focus on high-quality mid-cap stocks. The sectors I will prefer are banking, consumption, agro and infrastructure.
 

Vinay Khattar, head – research of WAIS, Edelweiss
Top Holdings	Cost price (Rs)	Current price (Rs)	Value (Rs lakh)
Suzlon	57.18	57.90	1.04
Hindustan Cons	61.68	63.60	1.02
Aries Agro	171.97	180.60	0.99
Punj Llyod	137.75	135.95	0.98
KEI Industries	33.85	37.30	0.97
Total investments			9.85
Cash			0.58
Net worth			10.44

What are the key factors that you look for in a stock before selecting it?
Our stock picking is focused on themes that we want to play. For long-term investment, I look for good management and high cash flows. Also, I prefer asset-light businesses with lower working capital needs.

What returns are you aiming at?
Returns over 15 per cent on a long-term basis are acceptable. My first principle is capital protection and I work towards that. The overall aim would, of course, be to remain focused on beating the benchmark while protecting the capital.

Has the current rally come as a surprise to you, and where do you see the markets headed in the short to medium term? Will we see new highs?
We have been bullish, but are surprised with the strength and the pace of the rally. It is happening due to two strong reasons: quantitative easing followed by the western markets and strong fundamentals of the Indian economy. Quantitative easing (QE) is leading to huge money supply in the western world. Some of the money is bound to flow into emerging-market equities, which is clearly what is happening. India has had FII inflows to the tune of $20 billion. Of this, monthly flows in the month of September itself were about $5 billion. We believe the upward trend should continue with corrections on the way till central banks don’t start exiting the loose monetary policy. The early signs of this would be rising interest rates across the globe, which is unlikely to happen in the near future.

Do you expect some kind of slowdown in fund flows, given the high number of IPOs and FPOs in this last quarter.
We have had primary issuances worth Rs 50,000 crore in the current year till date. This is already close to the all-time-high primary issuance of Rs 52,900 crore in 2007. The pipeline for IPOs and FPOs for the balance year is looking even more aggressive with Coal India likely to come to the market to raise almost Rs 15,000-16,000 crore. At the same time, as mentioned earlier, FII flows are not only strong but are strengthening further with around $6 billion having been invested in the Indian markets in the past 25 trading sessions. Had it not been for such a string of issuances, the market could have been higher. We believe with the kind of money that India is attracting, we should be in a position to absorb this paper without too many hiccups.

What would you advise investors to do at this current juncture? Is this a good time to enter the markets?
My advise to investors would be to look at India as a long-term growth story which is at its inflexion point. We believe the Indian markets will continue to outperform most other markets in the world. It is important that we spend time in the market, rather than timing the market. Also, focus on high quality companies with great long-term potential.
 

Siddarth Bhamre, head-equity derivatives, Angel Broking
Top Holdings	Cost price (Rs)	Current price (Rs)	Value (Rs lakh)
Indiabulls Securities	26.05	28.30	0.85
Great Offshore	379.20	387.75	0.78
OnMobile Global	364.69	375.95	0.75
MphasiS	645.30	652.60	0.65
IVRCL Infra	161.55	162.55	0.65
Total investments			9.98
Cash			0.81
Net worth			10.78

 

Shishir Bajpai, senior vice president, IIFL Private Wealth
Top Holdings	Cost price (Rs)	Current price (Rs)	Value (Rs lakh)
Ajmera Realty	266.95	265.80	1.06
Jindal Sth Wst Hold	2180.36	2094.15	1.05
IFCI	68.55	69.50	1.04
Indiabulls Real Estate	175.95	190.40	0.95
OnMobile	365.40	375.95	0.94
Total investments			11.07
Cash			1.60
Net worth			12.67

 

Ajay Parmar, head research, institutional equities, Emkay
Top Holdings	Cost price (Rs)	Current price (Rs)