Rakesh Jhunjhunwala does not expect a third wave to impact markets, bullish on banking stocks

He is highly optimistic about Indian economic growth either "covid or no covid".

Jun 22, 2021 01:06 IST India Infoline News Service

Rakesh Jhunjhunwala
Rakesh Jhunjhunwala, referred to with nicknames such as "Warren Buffett of India" and the "King of Bull Market" by many investors, expects the bull run in Indian markets to continue for decades. He is highly optimistic about Indian economic growth either "covid or no covid". He also believes there will be no third wave of Covid-19 pandemic to impact markets. Among sector-wise stock investments, Jhunjhunwala is bullish on banking stocks.

In an exclusive interview with CNBC TV18, the market bull said, "Wave or no wave Indian economy is much better prepared to face this kind of crisis. I, for sure, can bet my money there will be no third wave."

Jhunjhunwala does not see any third-wave impact coming to markets. However, he also guided investors to have a cautious stance and also stated that even if there is a third wave, Indian markets are already discounting it.

Talking about the Indian economy, Jhunjhunwala told in the interview that the economy is in take-off stage, covid or no covid,” he added, “We went through the NPA cycle, saw a lot of change in Jan Dhan, IBC, RERA, now reforms are happening in labour laws, farms laws. I think India is on the threshold of long economic growth."

Jhunjhunwala expects corporate profits to GDP to improve to 5-6% in the current year.

Jhunjhunwala stated that the bull run will last for decades. Notably, Jhunjhunwala pointed out key factors for PSU stocks.

He said that if the government gets its act right, PSU stocks can give you tremendous returns. Jhunjhunwala added in the interview that, "I have put my money into PSU banks but I think the entire sector can go well."

He also spoke about metal stocks by saying, "If you base yourself on last quarter prices, today’s prices are 20-25% higher than the average realisation of the previous quarter. Companies could see earnings of Rs 200-300 per share. Cement stocks are valued at 30-40 times earnings, steel stocks are valued at 5-7 times earnings and people are doubting it."

Furthermore, Jhunjhunwala also highlighted banking stocks.

He said, "When there is demand for money, banks will get bargaining power and then lenders that can garner deposits will get that power so I’m bullish on the banking sector as a whole and especially on the old public sector banks because they have the cheapest valuations and are going to see the biggest upside in earnings."

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