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Chat Transcript

Devarsh Vakil

Head -Advisory (Private Client Group) , HDFC Securities

Sectors to add and avoid in FY18 ?


Questions Answered


guest: How can I start with 5000 in share market

Devarsh Vakil: Hello. You can start investing in stock markets with as little as Rs. 500. Start Investing by buying a Multicap Diversified mutual fund.

guest: Sir suggest stocks for next 25 yrs plan free from recession political or any adverse situation

Devarsh Vakil: One should look at stock markets and equities as an attractive Asset class for long term investments. Identify sectors which have long term secular growth potential. Once you identify the sectors , do bottom up research and identify stocks. Keep checking the health of the balance sheet and valuation at regular intervals and then decide whether continue to hold the stock or book profits. We like sectors like HOUSING FINANCE • PRIVATE SECTOR BANKS • AUTO ANCILLARIES • MEDIA & ENTERTAINMENT • FERTILIZER AND CHEMICALS for the long term.

guest: Is it a good idea to pick up pharma stocks which have slid 30-40% in the past year or so ? How about entering banking stocks which are already close the 52 week highs ?

Devarsh Vakil: Pharma Sector has been facing issues on the back of regulatory compliance issues (US FDA and UK MHRA). Apart from that, we have seen Domestic pricing also impacting growth of the companies. Sector has under performed. However We expect things to get back to normalcy. It is a good idea to identify stocks which are close to resolving their problems. the timming of the exact date of resolution may not be known, but if it is reasonable sure that problems will be resolved. We remain Positive on Sun Pharma, Lupin and Cipla over the medium to long term.

rapa0be7: Suggest two top sectors for 2016-18 and few stocks for retail investors. Thanks sir

Devarsh Vakil: We like Housing finance Sector and Media & Entertainment Sector as long term investment themes. Apart from this Branded Garments stocks, Aviation stocks, Mid cap IT product companies should be substantial part of your portfolio.

vipin7011: Sir Powergrid mein near term (1-2 months) invest karna sahi rahega kya?

Devarsh Vakil: Out of the 26 states and 1 UT now part of UDAY, 16 states have engage in restructuring of DISCOM liabilities. With reduction in at&c losses and improving cash flow the power sector will witness revival in demand by the Discoms. The benefits will accrue over the next 2 to 3 years,

guest: 1>How about banking sectors ? Which one to choose Public or Pvt & why 2> Which sectors we should look for post GST

Devarsh Vakil: Private banks have been out performing for a while , though it is time to get public sector banks back on the radar. Government is trying to solve the NPA mess and some new measures are expected to be announced soon. As far as GST is concerned it is a historic reform for India since Independence. There are some deficiencies in GST, but it is still a transformational change with an extraordinary IT backbone and will substantially improve tax compliance. After initial teething trobles all the sectors will get benefits as unorganised sectors will loose market share to organized sector. Logisitcs is an obvious beneficiary. Apart from that branded apparels, Media, building material sectors will be major winners.

pramodayril: What about Energy Sector?

Devarsh Vakil: While we remain positive on the gas outlook in India, we expect 4Q to be a mixed qtr for the gas companies. Petrol mktg margins are up diesel margins are flattish. absence of invesntory gains may lead to lower EBITDA qoq for refineries. Alternate energy sector is attractive for longer term .

guest: Which sector is good for investment

Devarsh Vakil: HOUSING FINANCE • PRIVATE SECTOR BANKS • AUTO ANCILLARIES • MEDIA & ENTERTAINMENT • FERTILIZER AND CHEMICALS for the long term. Thank you all for the joining. Wish you all a profitable FY18.
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