Q: Do you cover any of these three stocks from the oil sector Reliance Petroleum, Essar Oil or Cairn India?

A: We have covering on the oil marketing companies including Reliance. On Friday we have seen that purely based on apprehension and speculation that government will ask all these companies to share the burden as oil marketing companies are sharing and also the refining margin is Singapore has come down to some extent.

But overall our view is that both Reliance Industries as well as Reliance Petroleum are fundamentally strong companies. In case of Reliance Petroleum their commissioning would be ahead of their schedule. So we are extremely positive on both the stocks.

Q: The other pocket that closed weak was real estate, any call that you have on that sector or any specific buy?

A: There are a lot of apprehensions about the slowdown in real estate. But our call on real estate is that it would be stock specific and those who are not majorly into residential segment but into commercial and office space etc they will not be affected that much because demand is still very strong on those segments and also those who have already raised money and not dependent on raising money now they will be better bet. Even those who are having geographical spread rather concentrating on one particular region will be better.

So there are lot of variables within real estate space also but if somebody wants to take a view on real estate or stock, we would say it has to be very stock specific within real estate sector also.    

Q: What stood out this time around by way of banking performance public or private?

A: Two things have emerged from the results for the banking sector. The apprehensions of the forex losses etc were exaggerated and most of the banks came out with good disclosures so I would give high marks for Axis Bank about their derivative exposure etc.

I think market is much more pacified about the whole derivative loss side of the banking side but now the market will be looking as to exactly what would be the net interest rates, what would be the margin, CASA etc.

We are very positive on banking space at this point in time. We believe that there is a lot of value because they have fallen so much  but we also see a possibility of interest rate increase because that is a next logical step because CRR hike has happened twice but did not work out but the next step probably can be interest rate hike and if that happens then again there will be knee jerk reaction for the banking sector but if one takes a one year view then at this price lot of banking stocks especially the PSU banking including SBI looks good to us.

Q: What do you make of this morning’s opening?

A: Opening is broadly inline with anticipation; it is about half percent down which most of the Asian markets were. But this is a time when one cannot take a call on the Sensex or Nifty stocks; I think this is a time to pickup good quality midcap stocks for e.g. Adani Enterprises etc where some underlying things are there for e.g. Adani Power’s Draft Red Herring Prospectus (DRHP) has been filed so something is emerging there so one can buy this type of stocks. If somebody has to have frontline stock then one can systematically invest in stocks like SBI or Reliance, every dip should be an opportunity.       

Disclosure:

I personally do not hold any stocks in the companies discussed today but Religare clients might have positions in any or all these companies.