Porinju: Reliance may rise 20-25%; why investors must watch politics 

 Some stocks, such as Reliance Industries are coming out of that consolidation after a decade, Porinju Veliyath, MD, Equity Intelligence India while asserting that Indian markets are at an “inflection point”. MD & Portfolio Manager, Equity Intelligence India | Error loading player: No playable sources found Over the past few weeks, the Street has repaid investors’ faith with good up move. While Nifty and Sensex are close to all-time highs, the markets have been consolidating the past two years, with index-wise disproportionate returns, Porinju Veliyath, MD, Equity Intelligence India said. Some stocks, such as Reliance Industries are coming out of that consolidation after a decade, while asserting that Indian markets are at an “inflection point”. Reliance Industries shares climbed a nearly 9-year high to Rs 1,253.45, surging 6 percent intraday Monday on the back of value buying. Strong rally helped it to cross Rs 4 lakh crore-mark in market recapitalisation, for the first time since January 18, 2008. Currently, it is the second highest valuable stock in market capitalisation terms after TCS that is valued at Rs 4.88 lakh crore.

 Reliance stock gained nearly 17 percent in four consecutive sessions, especially after brokerages have given a thumbs up to Reliance Jio's new tariff plans and its announcement that it will start charging subscribers with effect from April 1, 2017. Reliance Industries can still have an appreciation of 20-25 percent going forward on the back of futuristic businesses the company is getting into, Veliyath said. “Reliance can be a decent compounder from these levels,” he added. In view of the state assembly elections, it would be “foolish” for long-time value investors to ignore politics, he said. “Politics is at inflection point as far as investors are concerned. 

The key word is development. For the first time, every political party has started talking about development and economic development for the first time. This can make a big change in the way politicians manage the economy,” he said. Besides, Veliyath said that Indian households are under-invested in the equity markets. Recent government decisions should increase household participation in equity market, he said. He is bullish on smaller private sector banks like Lakshmi Vilas Bank on the back of changes in the banking sector in the next 5-10 years. In the dairy sector, Parag Milk Foods is trading at attractive levels making it a good bet, he added

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