Rakesh Jhunjhunwala of Rare Enterprises, in an exclusive interview to CNBC-TV18's Shereen Bhan said 2017 was a year of stellar gains and 2018 will be a year of consolidation.
He said the flow of local money into Indian markets is just the beginning and the it is not going to stop.
Five key takeaways from the interview:
On pharma sector
I am pretty sure the worst is behind us. The problem was the US generic competition, the fact that there were all kind of threats that the government will impose price control in India.
I think the pharma industry’s worst is very much behind us. Now the Indian pharma industry is entering unknown, risky, but exciting phase, where companies like Sun Pharmaceutical, Lupin, and others are going into specialty generics. Even if one of the medicines succeeds, it could be a game changer.
On banking sector
There is an unprecedented growth opportunity in the banking sector. Once provisioning normalises for banks, earnings and multiples will expand.
On economic reforms
The effects of insolvency and bankruptcy code (IBC), the goods and services tax (GST), the aim to construct toilets, the Jan Dhan Scheme, opening of bank accounts, digitalisation of the economy – it is all a process. I think with every passing day, the benefits of these things to the Indian economy will go up.
On emerging markets outflow
I think the local influence is going to be far greater than the foreign influence. The major amount of foreign money is company specific. Lot of people are invested in HDFC, lot of people are invested in HDFC Bank, lot of people are invested in TCS, so I don’t think that has got anything to do with India, it has got to do with Indian companies.
On 2019 general elections
I personally feel it is too early to predict an election which is going to take place 11 months from now. In the history of all democracies, bye-polls, by and large, always go against the ruling party. So, I think too much is being made of the fact that the BJP has lost the bye-polls.
The fact remains that Narendra Modi is the most towering leader of this country as of today and I think in a range of one to 10 if he is a nine, the second person is three.
I do not think the Congress or the opposition has got a credible leader as prime minister. Having said that, the fact is that the BJP did extremely well in the Hindi cow-belt; to repeat that kind of performance may be difficult. However, I am pretty sure myself, in all my calculations that the next government is going to be a BJP government, it is not going to be a khichdi government.
First Published: IST