While many market pundits are still sceptical about the upward trend in the Indian market, there is an air of optimism in some quarters. Speaking to Bloomberg TV India, Equity Intelligence MD Porinju Veliyath said the market cannot be in a bear phase until India becomes a $10-trillion economy.

What’s really happening in the market — is it the beginning of a bull phase? Are you still using some of the dips as opportunities to buy or are you perhaps seeing an upside of the markets from here on?

In the case of Indian markets, structurally we are in a bull market. Even if Nifty goes to 8,500, I will say the same thing. Talking bearish about Indian market is not a very sensible thing to do.

We can talk about the bear market once we become an $8-10 trillion economy. Investors tend to forget the fact that we have a long way to go from the current $2-trillion economy and that is the big picture. So people who miss the big picture, will talk about a bear market.

Would you be kind enough to build a five-stock portfolio that I can buy today, which can deliver me 25 per cent return at the end of 12 months?

I can give you 50 stocks instead of five. It is not about the number of stocks. If you see the last two-three years, anybody picking stocks with some extra smartness or knowledge,

I think they are doing very well despite the Nifty going below 7,000 or so. I am very confident about infrastructure because the new government has done a wonderful job in reviving certain industries. You will see unprecedented orders from the government in the next two-three or even 5-10 years.

But at the same time what has happened is there has been a major challenge in picking stocks in that sector as many companies are doubtful about their survival and their balance sheets are stretched.

Some good companies are richly valued in the market and priced at only one-tenth of the real market capitalisation we can build up in the next 10-12 years. So, L&T is a bit richly priced.

For, those who want to play it very safe for 25 per cent compounding growth for next few years, I think L&T is the number one pick. Some of the multi-baggers in two-three years time can be IRB infrastructure, Simplex Infra and Ashoka Buildcon.

With asset quality concerns, what’s your view on banks?

I have never invested in PSU banks in the last 10 years. Banks are in a bad business — the funds they borrow have to be repaid with interest but the funds they lend may or may not give a return. This is getting reflected in the PSU bank stocks. If someone is interested in banking stock, I will suggest him to play it safe and look at the old private sector banks like Federal Bank and South Indian Bank.

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