Retail investors should avoid Infrastructure: Rajesh Jain, Market Strategist

In a chat with ET Now, Rajesh Jain, Market Strategist shares his views on infrastructure outlook.

In the entire market rise, infrastructure just sat through. What picks do you suggest. And, if the real estate and infrastructure are running, cement cannot be far behind?

Over the last quarter, I have maintained cement as my top contrarian pick and the logic has been very clear, you cannot have real estate, infrastructure and road construction running away without cement participating. But on infrastructure, I have a hypothesis, retail investors seeking quick velocity of returns should ideally avoid this sector for the simple reasons, if you look at the track record of last 3 years, we have seen 2 key problems with this space. One is the speed of implementation is fairly slow and second, the estimates put down on paper while preparing project reports have found to be severely exaggerated, as a result of which the delivery or returns and the velocity of returns is further stunted. If you wish to invest in this sector, then you should stick with majors and for 4 to 5 year horizon I would go with GVK, GMR, Reliance Infra or a Lanco Infratech. In the near term, I see a visibility, growth and bottom line concreteness only in a stock like IRB where 7 out of 10 projects are up and running. There is little debt and there is a close performance to projection numbers. The traffic estimates for most of IRB projects have turned out to be close to reality as compared to the rest.