Rakesh Jhunjhunwala says bull run in Indian markets to continue

When the food is good at home then why eat it outside, said Rakesh Jhunjhunwala who advised investors to bet on the Indian equity market rather than the USA. The ace equity investor believes that the ongoing bull run in the domestic equity market will continue for a very long period.

He added that India is on the threshold of a long period of economic growth. In an interaction with CNBC TV18, he added factors reforms like RERA, Jan Dhan, Mining Law, and Farm Law, among others will support the economy which is coming out to the fore.

Digitalisation, good monsoon, the flow of money which is unimaginable, the highest capex cycle, robust saving along with rising per capita income will further aid the Indian equity market.

“India’s per capita income has reached beyond $2,300 and this will boost discretionary spending which will go into education, health, entertainment, protein and clothing sectors. Debt in the corporate system is also significantly low,” he said.

He further shared his views on the US Fed and available investment options in the market. Have a look.

US Fed and correction in the Indian market

Big Bull does not think that the Indian market was down last week just because of US Fed’s comment. “I don’t see any tightening by the US Fed before 2023. There is some heat in the international market and that heats need to be corrected,” he said.

Indian equity market corrected over half a percent last week after the US Federal Reserve surprised investors by signalling faster-than-expected rate hikes.

Views on broader markets

While commenting on broader indices BSE Midcap and BSE Smallcaps, which are hovering at their record high levels, Jhunjhunwala added that the bull market cannot be linear and there have to be corrections. “There may be some short-term disruptions in the Indian market but the bull run will continue,” he said.

On the third wave

He added that there will be no third Covid wave considering the pace of vaccination. “I don’t think there will be a third wave,” Jhunjhunwala said.

What to bet on?

Jhunjhunwala believes that the commodity supercycle has just started and it will stay here for at least 6-7 years. “I am extremely bullish on metal stocks in terms of earnings and valuation. Steel stocks are valued at 5x earnings and people still doubt in these names,” he added.

The market maven is also positive on the entire PSU pack as well as healthcare firms. He thinks that the government is very serious about divestment. “Govt is determined and I am also bullish on banks and on the so-called inefficient banks whether in the public sector space. You may see the biggest upside in earnings,” he added.

While commenting on healthcare, he said healthcare consumption in India will hit the roof and the country will become one of the biggest pharma centres in the world. There is a long way to go.

“40% of all medicines consumed in the US are from the Indian pharma sector. The sector also has a massive home market,” said Jhunjhunwala.

Advice to investors

He advised investors not to time the market and put some savings into equities every month. Investors can also consult professional managers, he said.