Ace investor Rakesh Jhunjhunwala continues to be optimistic about India’s development story and sees the present healthcare predicament as a “blip”. “This is a small diversion which is going to be a very long bull market,” Rakesh Jhunjhunwala stated in an occasion organised by All India Asset Management Association (AIMA) He stressed that India is now witnessing a multi-year bull run which, according to him, began when stock markets produced a bottom in March 2020 and Nifty hit 7,500 points. Since March 2020, Sensex and Nifty have now managed to surge almost 75% each and every.
“March 2020 was one of the biggest opportunities I have ever seen in my life. Risk reward was so much in your favour,” Rakesh Jhunjhunwala stated. He highlighted that the share price tag of Tata Motors had tanked to Rs 80 apiece, in the course of the March sell-off even even though the firm had robust fundamentals. Jhunjhunwala is now a shareholder in Tata Motors, buying a 1.3% stake in the firm in the course of the July-September quarter last fiscal year. The ace investor went on to add that the Union Budget of 1989, stock marketplace bottom in 2001, and 2020 March sell-off had been the 3 most significant possibilities for markets that he has observed.
Often known as the major bull of Dalal Street, Rakesh Jhunjhunwala stated that India’s corporate income to Gross Domestic Product ratio is quite low and expects it to develop as India moves into the post-pandemic era. “India is well placed to register double-digit growth in the next 4-5 years. Despite covid, we will see double-digit real growth even this year,” he added. Rakesh Jhunjhunwala believes that the government’s reform push would help his expectations as he cited the PLI scheme amongst other people as essential reforms undertaken by the government.
While stock markets have continued to stay variety-bound for the last handful of trading sessions, Jhunjhunwala believes a different sell-off is not on the cards unless every day coronavirus situations spike to attain a variety of 6 lakh situations a day. “I would have liked it if covid would not have come but I will not change anything in my investing horizon just because of covid,” he added.
Diving into pockets exactly where he sees chance ahead, Rakesh Jhunjhunwala stated that he is bullish on metal stocks. “If you look at the divergence between the valuation of cement stocks and valuation of metal stocks, and if you look at the prospects of metals stocks, I don’t understand it (the divergence in valuation),” he stated. Jhunjhunwala remains a believer in the pharma space for India. India’s pharma exports had been at $24 billion last year whereas US computer software exports had been close to the $200 billion variety, the major bull believes that pharma could replicate these numbers in the future.
Further, Rakesh Jhunjhunwala stated that the next leg of returns for investors would not come from the major wigs of Dalal Street but from the most battered midcap and smallcap stocks along with cyclicals.