E-governance, green initiatives and healthcare are hot new sectors: Porinju Veliyath

In a chat with ET Now, market master Porinju Veliyath, MD & Portfolio Manager, Equity Intelligence, says pharma as a sector is in negative territory but one can do stock picking here but he is not at all bullish on auto.

Edited excerpts

Are you bullish on the auto sector?

How many more cars can Mumbai absorb is a big question. So one may not be very bullish on the automobile industry going forward. If you identify blue chip companies in automobile that are doing well, may be they are going through their best of numbers in the nearby period and some of them are highly fancied by the foreign institutions and even the big mutual funds.

Some are quoting at 30 and 40 price earnings multiples. So one should be cautious. So, I am not very bullish on the automobile stocks though everybody talks very bullish about that because these stocks are staying at the highest level . Most of them are quoting at historic prices and India has more people potentially to buy cars but we do not have roads. So that is a very very important issue.

Even the tier two and three cities in the country, all over the country they are suffocating, in small towns, nobody can park the cars. So improving roads will change landscape of using and buying cars. I do not know if the Uber generation of business can bring down the number of cars on roads. So this is a very tricky subject. The sales of car companies may not boom as expected and as projected by many of the funds.

Which sectors are looking good for Samvat 2073?

Pharmaceutical is one sector we all have been discussing in the last two years. The pharma index is down by 1% or 2% as on today during Samvat 2072. Biocon and another stock Jubilant Life and many others doubled. What it means is that pharma as a sector did not perform. But while it is in negative territory this year, many stocks even popular ones have doubled, underlining the importance of stock picking.

Do you think there is no juice for Biocon it has already doubled?

I have booked profit in Biocon and we have shifted to another stock. It is also doing well. Bicon has more than doubled in last one year. So there is nothing exciting at this point of time for short term investors. But it is a theme and it is a concept stock. Numbers can start coming in the coming years.

You spoke about one more stock three -four months ago. Jubilant Life. Even that has been doubled?

Jubilant Life doubled in three months time. There are stocks which are doubling when the segment is doing badly. This is applicable to most of the sectors. Disruption is affecting many industries as such.So smart stock pickers may find the new generation businesses.

I have been looking at egovernance companies. We have may be 10-20 e-governance companies but those companies were going through some tough time because the environment is still not ready but I think going forward these companies are at an inflection point. They have built some business model, infrastructure, they have great people and some of them may be from Hyderabad.

Some of these companies can be multibaggers going forward.

Then there are new generation businesses like the green initiatives. The healthcare business can be another booming business, the diagnostic kind of companies are coming up. There will be more companies coming in for listing you have seen many of these healthcare diagnostic businesses came with IPO last year. Generally, the quality of companies coming out with IPOs have gone up in last one-two years but they are coming well priced so there is no excitement but still people are running after that because of very good management.