“Infrastructure will be the new story for the next year," said Ajay Srivastava, CEO of Dimensions Corporate Finance Services, adding that the only worry is do we believe in their governance and is the governance a valuation overhang. That is what is stopping some from entering this space. There is nothing wrong with the companies, some of them have given dividend through the worst of the period, he added.

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"I would believe, there is risk but the risk is not on economic fundamentals. The risk is on governance - that will there be a next income tax raid, will there be notice to the promoter for other things etc., that is what is clouding our mind more than just the economic fundamentals. Economic fundamentals wise, valuation wise, it is a clear buy. We are a buyer, we have bought infrastructure stocks little bit here and there but not too much,” Srivastava noted, adding that we had a lull and things are going to come back in a big way once the private sector comes into infra projects.

According to him, the Indian market has done reasonably well and so has the global markets. However, I don't believe that the market has reconciled itself to a 4-5 percent growth trajectory.

With regards to midcaps, he said it is nice to see the euphoria in them but they come back to hit you when they stay in your portfolio for a longer time. "I still believe that the midcap stocks are not going to do well in the market. If you have them, every rally is a place to get out, not get in. People who are getting in now in the midcap stocks, good luck to them. I don't think in an economy of 4-5 percent growth revival, midcaps have hopes of great revival,” he said.

Speaking stock specific, he said , “The issue is when you talk to the investors and everybody else is that they are not worried for the short-term for these stocks like Avenue Supermarts and that is a good part about what is happening in terms of investment in these stocks. Money going into these stocks is long-term in nature. The structural money, which comes in locally is long-term money, globally it is arbitrage money. So to that extent, the bubble is based upon the fact that the low interest policy in the global market will continue and therefore we will see liquidity in these stocks.”

“Locally, the flight to quality continues. So, the context remains that of liquidity - while local liquidity wants safety, global liquidity wants liquidity in terms of stocks’ ability to get in and out. I think this disparity will continue,” said Srivastava.

In terms of cement sector, he said, “It is a very cyclical sector. I don’t find it as a comfort investment because it needs too much of a hardwork to track, for too little returns. Therefore, I would say that cement is a sector in which you have to be very active investor and not a passive one."

On non-banking financial companies (NBFCs), he said, “I think it is too premature to get into that sector because the environment is so volatile, the regulatory framework is volatile. Recovery may have improved but I am not too sure whether that will continue for a long time to come and where they are going to get the new demand from."

"According to us, NBFCs is not the place for putting your money. If you are there, don’t exit with the losses but for fresh money to go in, in second tier NBFCs is not the brightest of ideas when the biggies are fighting for market share,” he added.

First Published:Jan 13, 2020 11:39 AM IST