The correction in technology and telecom stocks in the immediate future should be utillised by investors as buying opportunities looking at their growth potential in select fundamental stocks feels Dileep Madgavkar, chief investment officer of Prudential ICICI Asset Management. Further sectors like cement, auto ancillaries and petroleum could well be re-rated by the market with certain stocks still having the potential to appreciate between 30-50 per cent within a short-span. In an exclusive interview to Salil J Panchal and Rutvij Parikh, Madgavkar explains the logic behind the underperformance of the multinationals andfast moving consumer goods (FMCG) scrips.
Where do you see the Sensex in the immediate -to- medium term future ?
While it is difficult to hazard a guess on the sensex, select stocks in the broader indices look poised to appreciate between 30 per cent and 50 per cent over the next 8-12 months. The Sensex should fare well both in the short and long terms based largely on an economy that has shown definite signs of recovery, good corporate performance across sectors, strong institutional inflows and the accelerated implementation of reforms by the government. We could, however, see temporary declines in the market on the expectation of a harsh Budget.
Which sectors are you bearish on?
Even in sectors that do not fare well from time to time there can be select companies that stand out in terms of performance. Therefore, it can often be misleading to generalise sectors which would eventually make the investors miss out on good investment opportunities. For example, even when the cement sector was in the doldrums, companies like Gujarat Ambuja continued to do well. Similarly, when the auto (including tractors) sector was going through a rough patch, Punjab Tractors turned out a commendable performance. However, looking ahead, if I had to generalise, iron and steel companies, textile companies and NBFCs could still face rough weather.
Which are the sectors which look promising in the near term ?
