Top Sectors & stocks in focus:
Tata Steel
Pharma
"I am pretty sure that worst is behind for pharma sector as generic competition in the US is leveling off," Jhunjhunwala said.
He is positive on the domestic branded pharma businesses. "Indian pharma industry is entering unknown, but exciting space."
Healthcare majors Sun Pharma & Lupin entered into speciality generics, the next leg of growth.
Banking
He feels there is an unprecedented growth opportunity in the banking sector. "Once provisioning normalises for banks, earnings & multiples will expand. Banks with legacy problems will show strong growth," he said.
He is extremely bullish on troubled banks. "ICICI Bank carries characteristics of HDFC Bank in terms of CASA. For ICICI Bank, FY19 will see repair & FY20 will be a year of clean growth."
Return on assets and return on equity of private banks with legacy problems will improve in FY19 & FY20, he feels.
Jhunjhunwala said NCLT (National Company Law Tribunal) & IBC (Insolvency & Bankruptcy Code) will inculcate a sense of credit discipline. "People are underestimating long-term benefits of IBC & NCLT."
Healthcare Insurance
Jhunjhunwala is bullish on healthcare insurance in India. He sees a lot of growth opportunity in health insurance. "Healthcare insurance in India can grow 20 percent for the next 10-15 years."
Real Estate
He sees great next 2-3 years for the real estate sector. "I don't think real estate prices will increase, but volumes will grow. We are underestimating the positive impact of affordable housing," he said.
Jhunjhunwala has some investments in the real estate sector.
Consumption Space
All the potential growth in consumption stocks is priced in, he said, adding over next 5 years, FMCG returns would be lower than FMCG earnings growth.
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