‘Sensex could touch 21,500 by Q1 FY14’

Express Money

The good news first. With commodity prices projected to stabilise and interest rates likely to ease over the next 12 months, the bottomlines of listed firms, currently hovering at around 8 per cent, could surge to 14-15 per cent by next year. The change in sentiments could propel the BSE Sensex to its all time high of 21,500 points by first quarter of FY'14, says Dinesh Thakkar, CMD Angel Broking. In an interview with Surabhi, he has forecast that the BSE Sensex could touch 21,500 points and the Nifty 6,200 levels by the first quarter of 2013-14. The bad news is that corporate results are likely to be lacklustre this quarter and nothing exceptional is expected in the upcoming earnings season. Excerpts:

The RINL stake sale was deferred over issues of valuations. Do you think this will affect other PSU disinvestments also?

The government should be more focused on reasonable pricing. It should leave something on the table for retail investors so that they get returns on equity and have confidence to reinvest in the market. Investors lose interest with high valuations. So instead of focusing on deficit targets, the government should encourage people to invest in equity, especially at a time when they are investing more in gold.

Given that most PSUs are expected to follow government mandates, how attractive an option will be the proposed exchange traded fund for PSUs?

Fundamentally, PSUs are not attractive, until they are privatised. As long as they are run by the government, their bottomline and growth is controlled. So investing in it for the one- or two-year horizon is not wise. They are good buys for the long term and investors should have patience to hold them for 5-10 years and hold PSU stocks so that proper unlocking is done. We need to think beyond listing gains or divestment programme. They have a good value but in terms of growth are very limited.

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