Damani, Holland Expect Bull Run to Continue on Dalal Street

Indian stock markets are on fire with the benchmark Sensex and Nifty hitting record highs almost daily. Consider this, the Nifty took just 78 trading sessions to move from 7,000 to 8,000 as compared to 1,593 trading days to move from 6,000 to 7,000. The bluechip index has jumped nearly 50 per cent over the last year.

Despite sharp gains and rich valuations, big investors continue to be bullish about markets. Market veteran Ramesh Damani, who is a proponent of value investing and has a brilliant track record of stock picking, told NDTV that India is in a long-term structural bull market. (Watch full interview)

"There is no reason to say that markets are topping out now," he says.

According to Mr Damani, the first leg of the market rally, since September last year was driven by global liquidity and foreign flows. Global liquidity, which has been benign so far, has been a big driver behind the sharp gains in Indian stocks. Foreign investors have pumped in nearly Rs 78,000 crore into Indian equity markets since beginning of 2014.

The next leg of rally would be triggered by earnings growth as the economic growth picks up, Mr Damani says. India's GDP grew 5.7 per cent year-on-year, the fastest pace in nine quarters, data revealed on Friday.

Andrew Holland, CEO at Ambit investment Advisors says India is in a bull market for next 2-3 years, though he cautioned investors about the possibility of short-term corrections. (Watch interview here)

"The earnings growth story in India is explosive, you just need to be in the right sectors with right companies with right management," he added.

Mr Holland says domestic growth story of India is very strong, companies with domestic supply theme are likely to benefit from the economic upturn.

Deven Choksey, CEO and MD at KR Choksey Shares and Securities says 8,000 in Nifty is not a sacrosanct level. The Nifty will move further as lots of positive announcements are likely to come up this month.

"PM (Prime Minister) in Japan is attracting lot of investment to India... The last leg of monsoon is suggesting that crop output is likely to be better which will push the rural consumption," said Mr Choksey.

Stock picks:

Mr Damani says investors should choose companies with strong business fundamental and good management. Tata Motors has a global presence and is still available at a single-digit price earnings ratio, he says. Cyclicals and industrials will also do very well, he added.

Mr Holland says companies like Maharashtra Seamless and Jindal Saw are likely to benefit from the infrastructure focus in the oil and gas segment. These companies also have huge operational gearing which is going to boost their bottomline to a great extent, he added.

Mr Holland also likes Alstom T&D India and Siemens. These companies are going to witness a surge in their order book due to government's focus on power sector, he added