Market Voice: Rishi Nathany, Director, Touchstone Wealth Planners

'Indian valuations justified by growth'

Rishi Nathany, director, Touchstone Wealth Planners, tells Puneet Wadhwa that the Indian equity market is currently more expensive than its global peers and may see a slight correction soon. Edited excerpts:

The markets have been seen losing grip at higher levels in the past few sessions. Do you expect a correction anytime soon?
While a correction could happen anytime, we do not expect a major fall in the markets, since the excesses of a bull market are not to be seen yet. FIIs continue to pour in money, retail investors are still shy, the futures and options segment is not witnessing a very high cost of carry. All these factors do not portend a major fall.

How are Indian markets valued currently compared to global peers? Are they a bit more expensive?
We are certainly more expensive than most peers. But the premium seems justified, given our steady economic growth, robust financial system and the stability we showed during the global economic crisis. There will always be a premium for the fact that ours is a domestic production and consumption story.

What do you advise investors at the current levels? Is it better to be in cash? Or, would you advise investment through diversified equity mutual fund schemes?
For a long-term investor, timing the market may not work well. If one is convinced of the India growth story, one should stay invested for long-term gains.

What is your preference (in terms of sectors) for a medium-term horizon?
I like real estate, infrastructure and packaging sectors, provided one finds stocks at attractive valuations in these sectors.

What possible gains do you see for ONGC (in consortium) if it was to successfully re-bid for Cairn India?
We feel ONGC and others may not possibly counterbid for Cairn, as the deal has already been done at quite an expensive valuation.