The market opened the week with a bang as the 50-share Nifty hit the much-awaited 8000-mark backed by consumer durables and PSU banks.
Super bullish Raamdeo Agrawal, Joint MD, Motilal Oswal Financial Services expects Nifty to hit 10,000 by the next Union Budget giving way to 20-25 percent run hereon.
The first Budget was more about cleaning up and small incremental measures. However, the second Budget will be full of reforms wherein all pending issues will be addressed, he says in an interview with CNBC-TV18’s Latha Venkatesh and Sonia Shenoy.
Agrawal believes the early players that have performed well so far will lead the market extending largest gains irrespective of their sector or size.
Below is the edited transcript of the interview:
Q: What you think could be the leaders in the next leg of the up move?
A: The companies that have performed, whether it is midcap or large cap from a particular segment are the companies which are going to lead the pack because market is saying is that these are the companies irrespective of size, they are going to make a lot of money in the new environment whether it is infrastructure company, a car company or a paint company, pharma company. These are companies that are going to make money and hence I would be surprised if the leadership changes as the market progresses from 8000 to 10000.
Q: Udayan was saying he expects 9000 around the Budget, your guess?
A: I think next Budget should be closer to 10000 because we were there in Delhi and we were speaking to some people; they are saying that the first Budget was more about cleaning up and small incremental measures. However, the second Budget will be full of big bang reforms; all pending issues that one is expecting will be addressed in the second Budget. So, that is the expectation they are officially building. So, it is just about five months away, which is enough time for a nice 20-25 percent kind of run. It could be 9000, it could be 10000 but I am just saying it would be significantly higher from here.
Q: You were telling us about the stocks you would bet on at this juncture. In the run up to 10,000, would you care to look at things like PSU banks or the cyclicals, say a BHEL or would you stay with the autos, would you stay with the stocks that have brought us to 8000?
A: Portfolio management doesn’t happen because we have achieved 8000 so everything changes. We were in the portfolios because we thought that markets are going to move up. As we said in one of the forums, downs are temporary, ups are permanent. So, when you are with quality stocks you don’t have to check everyday. There will be correction as Udayan said, you have to stay put with your stocks and you should feel lucky that you have those stocks in your portfolio because at enhanced price, it is very difficult to enter those stocks. Therefore, one should not get into junk stocks, stay on with blue chips whether it is small cap, midcap or large cap and that would be my thought process.