No reason to be cautious on market, expect healthy returns over next few quarters: Varun Goel

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Last Updated: Jul 21, 2014, 05:24:00 PM IST

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'All the data points - be it IIP data, PMI services data, order sales numbers or cement dispatch number - all indicate a cyclical upturn in the economy.'

In a chat with ET Now, Varun Goel, Head of PMS at Karvy Private Wealth, shares his market outlook. Excerpts:

ET Now: What do you think is going to be the next big trigger given that most of the events, be it macro, budget or earnings, seem to be underway?

Varun Goel: We are extremely positive on the market. All the data points - be it IIP data, PMI services data, order sales numbers or cement dispatch number - indicate a cyclical upturn in the economy. The extent of the upturn is going to surprise most of the market participants.

In fact, in the early part of the year we were thinking that the real macroeconomic recovery will play out only in the first quarter of calendar year 2015, but it looks like we are going to see cyclical upturn probably as early as the next quarter itself.

We believe that the worst is definitely behind us in terms of macroeconomics. Earnings growth is largely in line with expectations - whatever we have seen so far, and they might actually start inching upwards in the remaining quarters of this fiscal. Hence, there is no reason to be cautious or bearish on this market. We believe that every dip is a buying opportunity and we see very healthy returns in the next few quarters.

ET Now: What is the portfolio mix looking like - are you taking some concentrated bets?

Varun Goel: Portfolio is largely in the aggressive sectors at this point of time. I would like to have typically a 25 to 30 per cent weight in BFSI, around 10 per cent in oil and gas, another 10 to 15 per cent in infrastructure and construction space and selective auto names. This forms the core of the portfolio and we would expect these sectors to do very well going forward.

I believe that even after the very strong rally, a lot of midcap companies in the auto ancillary space, in the private sector banking and mortgage finance companies are extremely attractive from one-to-two-year perspective and they should deliver strong returns in the times to come.