Saurabh Mukherjea, the founder of Marcellus Investment Managers, spoke to CNBC-TV18 about the exit poll outcome and what it means for the markets.
"The exit poll outcome was a positive surprise because the market was until then working with the assumption that NDA would need some coalition partners to form the government. If the exit polls outcome is validated by results on May 23 then this week in totality we could see a 5 percent rally in the market," said Mukherjea.
“We have seen a good flow of money in the last three months into Marcellus but we are telling our clients not to get too carried away and take a long-term view. Our view still remains that this is still a difficult economic situation – the financial sector is in degree of trouble, the job creation situation is not good, earnings growth has been weak for several years and is unlikely to recover quickly, therefore, sensible, cautious, fundamentally high quality investing is the order of the day,” he said.
According to Mukherjea, the real challenge in India politics leaving aside whether it is state or the centre or whether it is BJP or the Congress, it is the paucity of ideas. "One rarely sees politicians exercising their intellect to solve major political issues and so elections are an inconsequential thing in the Indian context."
“If you carry on doing the coffee can investing, which seems to work in India decade after decade, if you do that you make healthy returns and you grow your wealth overtime. There is very little room in India to get carried away and jump into the market with both feet and start buying broken balancesheet names or PSU banks.”
On the stock front, Mukherjea said, “Our view has been to buy high-quality franchises like the Asian Paints, the HDFC Bank, Kotak Bank, on a steady basis rather than trying to time the market, you will make pretty healthy returns with fairly low levels of volatility in your portfolio."