Top performing sectors in 2015 – An Interview

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Excerpts from my recent interview with IndiaNotes: 

Punit Jain, JainMatrix Investments

Punit Jain

Q: What is your view on the Indian equity markets? Is the correction due or we could see a continuation in the bull run? Please provide your long term perspective on the markets?

Punit Jain: In December we expect a mild correction where the market takes a breather. The Sensex move from 20,300 on 7th Feb 2014 to 28,800 on 28th Nov has been a 42% gain over 9 months almost without a break. All big gains are interspersed with small corrections (and the converse). Plus there is a year end (book your gains) angle for FIIs. But the market will revive in Jan 2015. The long term perspective is a 15-20% annual gain in markets over the next 3 years. This adds up to a 43,000 Sensex by Dec 2017. 

Q: Top 5 stocks you would place your bets on in 2015? Why? Which sectors do you think would be the top performers in 2015? 

Punit Jain: I cannot be stock specific in my commentary, but the sector leadership and the theme for our portfolios is IT Services, Auto and Auto Ancilliary, Banks, NBFCs, Housing and rural/ semi urban consumption. All the top bets would be from these identified sectors. 

Q: What is your take on Kotak Mahindra and ING Vysya Bank merger? Could we see more mergers in the banking sector?         

Punit Jain: Kotak Mahindra Bank was at one stroke able to almost double its branch strength and grow its retail presence. It is thus set to be a much bigger and stronger Bank. All the larger private banks are looking at aggressive growth, both organic and inorganic. There may certainly be more such mergers in the future. It is just a matter of a bank asset being available on the market at the right valuations.

Q: With global crude oil prices plummeting, is it the right time to invest in Oil companies?

Punit Jain: Its a mixed bag for the Oil & Gas sector.

  • The oil marketing companies will see falling prices at the pump, and subsidies have been withdrawn for many of the petro products. This will help them strengthen financially and their valuations should improve. (Positive)
  • The E&P Oil firms will suffer as the oil produced was benchmarked against international crude prices. Their revenues will be hit. (Negative).
  • The oil refiners will enjoy good margins and the oil prices do not affect them, they pass on any oil price changes. However the demand is falling abroad, so exports volumes may be affected. Domestic demand will be good. (Neutral to Positive).

Q: What is your take on SEBI norms for independent research analysts?  

Punit Jain: Its a very good initiative by SEBI. Speakers on national TV or newspapers will have to be careful about their words and ensure they comply with the norms. I think we will see the emergence of a better quality of research reports and communication. Its better for Investors.

This interview has been published simultaneously on IndiaNotes, at LINK.

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