My money's on Manappuram Finance and Dabur: Sharmila Joshi, sharmilajoshi.com

In a chat with ET Now, Sharmila Joshi, sharmilajoshi.com, gives her wealth creation ideas . Edited excerpts

ET Now: What is your first wealth creation idea?

Sharmila Joshi: I am going with Manappuram Finance. One of the big reasons why I am choosing this is that given the kind of performance that we have seen from the banking sector, I think there is going to be a lot of concern for investing especially in the PSU side of banks at least for the next couple of quarters till we get a sense of what is happening with NPAs. During this period, a lot of investments will go towards the NBFC space because here we have seen the regulatory framework getting better.

Coming to Manappuram in particular, we have seen the company perform very badly. We have seen their gold loan portfolio which has been their mainstay all these years, growing at a steady pace and going forward the management has indicated that they are diversifying into other products like microfinance, mortgage, etc. They would expect over the next couple of years, about 50 per cent of their AUMs to come from this business. So I think that is really good news for the stock going ahead. With legacy issues behind it, the company should be on a good growth track and the fact that they are looking at other businesses other than gold loan makes me like the stock. I advice buy on it with a target of Rs 58.

ET Now: What is the next recommendation?

Sharmila Joshi: The other idea is Dabur. I have a target of Rs 320 and I think this is a slightly conservative target. I could really up that if we see sales growth return to mid teens or higher following a good monsoon. This pick is based on the fact that we are enetring a season where you will see buying coming into stocks that could benefit from a normal monsoon. Let us not forget that for two years, we have had really bad monsoon and so did not see any rural pick up so this is the kind of play that will benefit from the rural pick up.

Again I think the news of the pay commission implementation will benefit Dabur. Also their sales to Nepal which had been hit are expected to be back on line. They have a product portfolio which has a lot of herbal products. That is the space that has really opened up with the entry of Patanjali etc and Dabur already has an established track record within that space. So given their product profile, their pan India presence and the fact that their quarter numbers were strong -- 16 per cent growth in FMCG space is not only surprising given the kind of environment that we have had but also augurs well going ahead, especially if pricing power returns. So Rs 320 seems a little conservative now but I would up the target only after we get a normal monsoon and a pick-up can be seen in sales growth.