‘If you’re greedy in a bad market, you’ll most likely make money’; check Naveen Kulkarni’s top stock calls

India is in the toughest market seen in a while, said Axis Securities’ Chief Investment Officer, Naveen Kulkarni. However, he recommended that investors make the most of this correction to accumulate good quality stocks and stay greedy in a bad market to make money. Here are edited excerpts from Naveen Kulkarni’s interview with Shaleen Agrawal of FinancialExpress.com.

Outlook for the Indian stock market

Naveen Kulkarni’s outlook is fairly straightforward, being that this is the toughest market seen in a while. In the past, market corrections have been accompanied with a reasonably high degree of volatility. However, according to him, this market is seeing low volatility and still is correcting, which means there’s an adjustment happening with other asset classes like debt. It’s unlikely to see a runaway market, instead it will focus on earnings growth and global cues. The correction is likely to continue for the next three to six months, following which, it is very likely that the market will see a return of 10-12% in the second half of FY24.

Should investors wait for the corrective phase to end before investing?

This is the time to invest, especially since markets move fast, slow moving markets are a rarity. Kulkarni suggested investors use this to build up a portfolio, since getting quality stocks at a reasonable valuation is difficult. “When you’re greedy in a bad market, you’re very, very likely to make money,” he said, adding, “When you’re greedy in a good market, you’re most likely to lose money.” When you need to be greedy and when you need to be fearful determines when you make money. If you’re fearful now, you won’t make money.

Sectors to find value in

There’s a wide range of sectors to look at, said Kulkarni. He recommended investors make the most of the reasonable valuations in the banking segment, specially focussing on HDFC Bank and SBI that are high-quality stocks. He also is bullish on automobiles and auto ancillaries along with the industrial sector as a result of the global supply side challenges and domestic capex boom. Lastly, he suggests investors could also look at the consumption basket, ranging from ITC to hotels, which can make a good amount in the next 12 or so months.

View on ITC

“ITC has a chance to see a 25% upside from current levels,” said Kulkarni. He said the stock is still quite cheap, and is likely to see consistent earnings growth in the next four quarters, has strong dividend yield, cash flows, governance and return ratios, which are all ingredients to make it one of the best stocks to own in Indian equities.

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