Indian equity markets have celebrated the return of a stable government, so should one still buy into the market is the big question. Sridhar Sivaram, investment director, Enam Holdings, said the house is still positive on the market on a broad scale.
“We think with the mandate that the Narendra Modi government has got the expectation is that many of the issues related to growth or financial sector will get resolved much faster than before. Moreover, the broader market hasn’t participated much and so there is enough available within the broader market. We do find enough opportunities in the market. So broadly constructive and positive on market right now,” Sivaram said.
When asked about the next finance minister, he said there are two names floating around and if either of them becomes the finance minister there would be no reason for the market to be unhappy because tough decisions have to be taken.
"Hypothetically, if Amit Shah were to become FM, the confidence in the market that tough decisions will be taken will go up because we have serious issues within the NBFC, HFC space and unless one is willing to take tough decisions these problems cannot be solved,” said Sivaram.
Talking about the lower oil prices, he said, lower crude price is the best way of doing a fiscal stimulus because it reaches everybody from an auto rickshaw driver to right at the top.
With regards to the midcap space, he said they are looking at companies with good cash flows, good business model and where the management quality is good. "There are many companies from media, chemical, cement spaces within the midcaps that have corrected, which one can look at," Sivaram added.
One would have to be very stock specific in current times, he said.
With regards to IT, Sivaram said, “I would rather play the domestic cyclical rather than the outward facing companies because if one were to look at the growth for some of these IT companies, their guidance do not give too much confidence, the revenue growth could be in single-digits for them. So there are much better opportunities available in domestic cyclical names, he said.