Nifty Prediction Nifty is heading for 23856 by 2024. Buy High quality names in delivery and hold as recommended.
Many of you requested me to share my longer term outlook on the Indian stock market and what to buy so here I am sharing one of the stocks that I remain very bullish on for the next few years.
Most people and investors as well as traders continue to remain bearish on the markets but we feel that would not be the right thing to do because as per my analysis this is the time to build a solid portfolio and hold for the next few years at least til 2024 when Nifty will touch 23856 yes that is my Nifty Prediction and I stand by that prediction.
Anyways, the important point is that since a long time we were saying that valuations were very steep in some or rather most of the high quality names and hence we had recommended to move to cash and during the fall in past few weeks we did get great stocks at great prices which to my personal view are and will continue to be market leaders in the times to come. The mistake that most people are doing is looking at investing as investing sounds odd right? But yes I am saying this that people are looking at investing as investing but this is not the right way to go about in my personal view. What I have been buying is not for today or tomorrow or I am not even buying with a view of investing per say I am suggesting an alternative view like that of an institution and an institution would like to buy strategic stake in a company for the sake that it is extremely bullish on the business prospects of the company in the years to come and coincidentally they will be the stocks that will give the 10 X returns in the next few years.
So when I recommend buying into nestle India I am not asking you to buy just from an investors perspective who will buy at 12000-12500 (like we did) and then book out at 18000 No I am not suggesting that. What I am suggesting to do is to buy from a strategic stake in Nestle India because I am inherently bullish on the business of that company. Let us take an e.g. Maggie Noodles is one of the product of the company and has been a market leader regardless of what happens Maggie Noodles has retained its No 1 selling position no matter what and is in near monopoly business so till I do not see a threat to Maggie noodles I don’t think there is any problem for the stock. The same goes for other products of the company they are market leading products and there is virtually no competition further ask anyone who is a fan of Maggie noodles they will continue to consume the same no matter what so although in the near term there could be some dent in the earnings no doubt but over a period of time Nestle India has kept out performing and growing its earnings and till the dominance is not tested or a real competitor does not come into the market I do not see why this business will not do well so look at buying into nestle India from a strategic investor stand point and you will make the 10 X return here because these guys will continue to generate free cash flow year after year and that will help them create more dominance and in turn more growth. I am just giving you an example there are other factors also why I am bullish on Nestle India besides just Maggie noodles or brand Maggie or for that matter Nescafe. Point is that if you look to buy into stocks that have near market dominant position, have a good management, have a track record of generating free cash flow so if you buy such stocks and hold on to them timing the market will not matter much because these stocks will continue to grow their earnings and that in turn will continue to create growth for the stock which will translate to higher stock prices and that will keep happening consistently for years to come till their products don’t face any real competition so this is the time to buy into stocks from a longer term perspective and hold because there is where the 10 X money has to be made. The similar story remains in Divis Labs and Abbot India and also all the other stocks that have formed our portfolio today. The combination of good management + product dominance + innovation = free cash flow = higher eps = higher stock price.
Now please don’t misunderstand me I am not suggesting for one minute that we can’t see these stocks correcting a bit more well sure they can but the point is take out the history books and check at every stage whenever there is a consensus that markets wont do well for the next few months and you have got high quality names which have been consistently outperforming on the earnings front on any major dip or correction that has been the best time to buy and hold. There are other similar stocks whose earnings wont get impacted beyond a point even if the economy slows down. Yes they will take a hit I am not suggesting that they are recession proof but yes they will keep up with the earnings and keep making money which will in turn be free cash flow and these stocks will will fall lesser in times like now and bounce back faster and recover stronger on the other side of the pandemic which will make them the market leaders in the next round of the bull market (e.g. Nestle India made fresh life highs and recovered all losses from the lows). Let me also tell you what I see in the next few years. If you are in the right set of stocks making 10 X in the next few years wont be a surprise. E.g. we identified Maharashtra Scooters at 100 Rs in 2008 and continued holding till today even after the fall we are at 1900 Rs and not to mention that dividend yield on them has made the stock virtually a free stock (last year itself Rs 50 was dividend payout) so the point is that 100Rs in 10 years is 1900 even after the fall was 4800 before the fall so I leave the calculation to you but at the point when I was buying MSL everyone told me that market is extremely bad and what not and the exact same situation is there now so Buy into high quality names as we have recommend and hold for the next few years will make 10 X returns. As of now people are too focused on the near term and hence most have missed the rally that has come from the lows. One of the stock that we bought even today is up by 78% from our price not that I am suggesting to time the market but that stock will continue to do well even in a bad situation and will come out more stronger at the end of this pandemic (the quality of good management) anyways look to buy into high quality and hold for longer term there is where the big money has to be made. Look for free cash flow stocks do not make the mistake of buying cheap valuation stocks because they look cheap in some cases and are actually cheap but they wont lead the rally because of lack of free cash flow and good management case in point is some of the PSU banks looks a real value proposition but lack of good management will not let them be leaders and in turn wealth creators.
If you would like to have guidance on which stocks to buy you can contact me and have our assisted PMS product which has been a wealth creator and has out performed the markets consistently. I am confident that in the next few years by 2024 these stocks will give us great returns.