Saurabh Mukherjea, founder, Marcellus Investment Managers, shared his views on the fundamentals of the market.
HDFC Bank, Kotak Mahindra Bank, Asian Banks and Nestle are high-quality companies, with a stellar long-term track record and that is why people wanted to buy these stocks.
“We are buying companies with clean financial statements, high-quality governance, stellar franchises, and long track records of cash generations. Where I am perplexed is where you don’t have these sort of track records and that is almost 90 percent of the Indian market and still people want to buy these companies with less than ideal fundamentals at giddy valuations,” he said.
If you want to put money work in India in stellar franchises, structurally compounders such as HDFC Bank, Asian Paints are good and it is a good time to buy, he said. "If one wants to play rung beneath that a play, for example, Maruti Suzuki or HUL, this is not the time to be speculating on second line stocks," he added.
From the IT space, the house is positive on TCS.
With the sense that rupee is expected to go to 75-76 to dollar over the next 12 months, IT stocks should be well placed, said Mukherjea. “Within IT, you need to have a massive scale to be able to give cost efficiency benefits that the western clients seek and so TCS remains the best play,” he said.
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