Sensex at Mt 100K only a matter of time, will happen in next 4-6 years: Shankar Sharma

"In a growing country like India, there are incredible even IPOs for example some of them are now getting more reasonably priced, and you are making significant money even in IPOs. Leave alone the disasters of the Nykaas and the Zomato. I think people have learned their lessons. And now you are seeing more reasonably priced IPOs coming to the markets," says Shankar Sharma, the founder of GQuant Investech

Nikunj Dalmia: Shankar Sharma, you do not manage public money. But give us an idea of how would you have done that.
Shankar Sharma: Let me give you the reason why right now I do not manage it. You should manage public money in a bear market because that assures your bread and butter. In a bull market, you should manage your own money because why should you settle for half a percent when you can make a thousand percent? So, you see, I am very flexible. I will switch between public and personal money depending on the market.

So, I am managing personal money because I am very-very bullish. I can make a thousand percent, and that is what you are making, and you will continue to make in India. I hear a lot on Twitter that you guys were lucky, you were born in the 60s so, you entered the markets when you were in your 20s which was 35 years back, India was small, and with big opportunities, you could make outsized gains. But I disagree.

I think with the larger size of the opportunities, the scale itself becomes much larger, much larger. So, today is actually probably the best time in the history of modern India that you should be out there investing because a $3 trillion economy will grow. You will simply add $150-200 billion in GDP every year, which used to be the GDP when I entered the market, just the scale is massive. Nothing is lost. It is not too late. Get in now.

Nikunj Dalmia: Shankar, you are looking at investing where you can make a 1000% return. How are you investing? Where are you investing? And which is the next stock that could give a 1000% return?
Shankar Sharma: I am meeting potentially one such company tomorrow.

Nikunj Dalmia: So which is the last company you have already met? Tell me that.
Shankar Sharma: This morning, I met one which I am already invested in. And I think it is a great story. And I am making about, not a lot about 60% in less than six months' time. So, we will take that right. I mean that is not 1000%.

Nikunj Dalmia: You are playing blind now, we should talk about the scene.
Shankar Sharma: No, but there are, I mean, I am telling you, it is incredible, the entrepreneurial energy. It has never failed to amaze me that the number of companies out there with fantastic business models and now promoters that generally improve their governance or are being forced to improve their governance by more stringent laws, whatever might be the reason at least there is better transparency and valuations are still not demanding. I can tell you, if you do a simple run and as media houses, you will, you know, mid-teen multiples also decent-sized companies are available. So this market is crazily undervalued at the mid and the small end of the market, for sure.

Nikunj Dalmia: I proudly narrate this example to everyone that when I started my television career in 2000, the quarterly profit of Infosys was Rs 55 crores. Today the quarterly profit of Infosys is about Rs 4000 crore. It is 23 years, 55 quarterly profit has become Rs 4000 crore. In the last 20 years, what have we seen? We have seen 9/11, we have seen 2008, we have seen the Covid crisis, we have seen the taper tantrum. But the Sensex has beautifully gone from 5000 to 60000 plus I guess that is the kind of timing we really are in. So Shankar, again, first let us get the headline Sensex four to five years, do you see Sensex could touch one lakh?
Shankar Sharma: I am absolutely certain it will reach one lakh. Now whether it happens in four years or six years frankly is really a meaningless debate. But looking at the nominal GDP growth rate which we are looking at, you can safely say we can grow between say 12-14%, maybe 10 and 14%, you will approximate that number and if you compound it at that, so in four years roughly from 60,000 you add another say, it comes to approximately one lakh in four years. I mean it is not a reach to see one lakh just at the simple compounding of the nominal GDP rate. I think it is a given 100%.

Nikunj Dalmia: How many stocks do you broadly own in your portfolio and what is your style of investment when you are investing in small and midcap stocks? What are the factors you look at?
Shankar Sharma: I own a lot of companies because I believe in investing and in smallcaps in general. I do not want to be concentrated because I would rather be diversified, to begin with, and gradually increase based on my confidence in the numbers in the business because there will be a lot of failures. It is not like the promised land in all the companies to be clear. There will be failures, and I am cognizant. I have been around for 30 years in this game.

So, I keep it fairly wide, maybe 25-50 companies depending on the kind of market we are in. And gradually, it is like a marathon. So you start out with 100 runners. I have got 100 runners, not that much, but 50. And then the field will spread out. You will find a bunch of guys leading the pack, five or seven runners, then you are clustering in the middle of maybe 10 guys, and then there will be 25 bringing up the rear.

You gradually eliminate those guys, bring the money back into the leaders and the midfield people and bring in newer companies to join the race and it is a constant process. As I said, in a growing country like India, there are incredible even IPOs for example some of them are now getting more reasonably priced, and you are making significant money even in IPOs.

Leave alone the disasters of the Nykaas and the Zomato. I think people have learned their lessons. And now you are seeing more reasonably priced IPOs coming to the markets.