Prasun Gajri, chief investment officer, HDFC Standard Life Insurance, tells Priya Kansara Pandya that investors can expect a 13-15 per cent annualised return from the equity markets over the next two-three years. Edited excerpts:
Given the recent surge, what is your take on the Indian equity markets?
We are clearly cautious at the current market levels, as valuations look stretched. The rally has been fuelled by large foreign inflows. It is very difficult to take a call on how much more flows can come in, or if there will be a slowdown.
Given this, our strategy is to be invested, but remain cautious while selecting stocks or sectors.
Where do you see markets in next one year?
It is not possible for me to put a number for the next year. However, over a longer horizon of two-three years, I expect a 13-15 per cent annualised return from the equity market.
What has been your strategy for the last six months? Do you plan to stick to the same in the near future?
We do not use cash as a strategy and stay invested as far as possible. Our strategy has been to carefully choose sectors and stocks.
In last six months, we have cut our exposure in financials, as we believe they have run up too much too fast. We have increased our exposure in the oil and gas space and remain overweight on fast moving consumer goods (FMCG) and pharma, while being underweight on metals and telecom. We continue to maintain these views.
What will be your advise to investors?
We always advise to invest for a longer term. Investors can make good returns if they remain invested and stick to their asset allocations. I feel taking a short-term view, based on the fact that the market is showing an upward trend, may prove counter-productive.
