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In an interview with ETMarkets, Kohli said: “I am most bullish on Infra, Metals, PSU Banks and IT for the next 3-5 years,” Edited excerpts:
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We have seen quite a bit of volatility in markets post-budget, but the good news is that Nifty managed to hold on to crucial support levels. What is your take on markets – is it profit-taking after the recent run-up?
Rishi Kohli: Yes, the extreme run-up in indices and stocks seen in Nov-Dec was stabilizing after some retracement in the Jan-Feb period which is anyways historically been the most difficult period in terms of both market direction and volatility.
Hence, this is no surprise. Nifty index in fact despite the attempt to move down largely managed to stay in a range but Bank Nifty did take a slightly deeper cut but also retraced exactly from support levels hence should also be seen as a retracement of the strong up move seen earlier.
These are all healthy bull market retracements so far and nothing out of the expected roadmap.
What is your take on December quarter earnings from India Inc.? What is the sense you are getting from the management commentary?
Rishi Kohli: As I and my team are quant and systematic-oriented, hence we do not focus on the management commentary as such and have our quant models based on the numbers and various fundamental metrics apart from technical and cycle analysis.Overall, it seems that the December quarter earnings were not as good as expected or the previous quarters and there were more misses than hits but on a combined basis at the index level, they were still marginally above expectations.Hence, it all bodes well for the index although sector and stock dispersions have been there in terms of earnings, and I expect stocks to move in line with the same.
Recently, PSU/PSE stocks have been in focus after the recent run-up. Do you see more legs to the rally in 2024?
Rishi Kohli: Yes, PSU/PSE stocks have had vertical run-ups in the last few months and hence many are majorly overbought in technical terms.
However, there are many where either they are not overbought yet or are coming out of long-term troughs or are still cheap on a P/E basis – hence these can still be focused on and would have more legs to their rallies in 2024.
What about valuations compared to historical averages and the globe? Are we on a stable pitch?
Rishi Kohli: Valuations in terms of index P/E are on the higher side compared to historical averages and what we see globally.
However, I am a bigger fan of the PEG ratio for valuation, and based on the same, we may not be undervalued as such but more fairly valued and hence attractive both on an absolute and a relative global basis as well – hence I believe that there is easily room for bigger upsides in the Indian markets.
In the private banking space – we have seen a 19% kind of drop in HDFC Bank. Where is the smart money moving?
Rishi Kohli: PSU Banks have been the outstanding performers in the past 2 years as compared to private banks and after a brief halt that seems to be resuming.
Hence, I would bet on PSU Banks outperforming private banks again in 2024 and within PSU Banks, the ones that have not moved much as compared to those that have had outsized moves already, would be the ones to focus on the most although they would overall again move upwards as a pack.
Which sectors will create wealth for investors if they remain invested for the next 3-5 years?
Rishi Kohli: I am most bullish on Infra, Metals, PSU Banks, and IT for the next 3-5 years.
As we build on gains any specific factors that could derail Bull’s party on D-St?
Rishi Kohli: The Indian General Elections are just around the corner and therefore would be the biggest factor in the near term.
If there are any surprises in the elections or even any such buzz in the run-up to the elections, then there could be knee-jerk reactions seen on D-St.
From a global perspective, geopolitical issues still remain and any escalation of any of these can lead to market panics and hence should be closely monitored if one is not systematic in investing and trading.
Which sector is offering good buy-on-dips opportunities?
Rishi Kohli: Banking and IT and these would continue to offer opportunities to buy on dips due to regular bouts of volatility as seen in the recent past.
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
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