Kunj Bansal, Senior Vice-President PMS of Kotak Securities feels that the market will remain range bound in the short-term and consolidate at current levels. He also believes that if market does not sees further lows then domestic liquidity will continue. He likes Hero Honda’s numbers and feels that telecom will be a good growth story.

 Excerpts from CNBC-TV18’s exclusive interview with Kunj Bansal:

Q: Inflation was expected to be around these lines. What’s your own call on interest rate from here on and of course interest rate sensitive sector banks, real estate, autos on the back of a couple of decent numbers as well from the autos for e.g. Hero Honda?

A: Inflation for this week was expected at around this number but a significant point to note is that the inflation number for the week ended February 16th has been revised sharply upwards.  So I don’t know and I hope that that is not the case as we keep moving ahead because if that is the case then it further gives negative indications.

Coming to the sectors affected by the interest rate. I think banking and real estate a large part of interest rate hike had already got built in and that’s what we see in their valuation but if we keep seeing this kind of numbers then it might take some time for them to attract investment attention in the near future.   

Q: How are you looking at the markets in general at this point in time? Would you say that apparently if the Reserve Bank does not come with a further rate hike and going by the decent set of numbers that several companies have posted like Bharti and even the tech stocks not doing too badly at least in terms of their guidance? Do you think the market now is likely to continue the kind of rally that it has built up?

A: Difficult call but at best market looks like consolidating or being in a range irrespective of whatever RBI announces even if it announces a fresh further hike or any other kind of moves in the credit policy or it doesn’t irrespective of that we see the market remaining range bound in the short-term and consolidating at current levels.

Q: Can you make a case for sector churning at this point of time. Capital goods were not that good, banks have been mix, and telecom has come out to be extremely strong through the earnings season. Can you make a case for sector churn and and how that may have change over a last month-month or two?

A: Sector churning case I don’t think can now depend or should be looked at from this quarter’s numbers. I think that needs to be looked at from the current financial year’s numbers i.e. FY08-09 and based on that in terms of valuations we have already seen whatever was to build in and that’s where we just talked of banking and realty sector those valuations have corrected. Surprisingly automobile on the two wheeler side especially Hero Honda as you just said has shown a positive numbers, telecom continues to be a good growth story.   

Q: In short what are you recommending as buys in terms of sectors or stocks and what are you shedding after the results?

A: In PMS division we manage investor’s assets so not recommending but in terms of looking at assets we continue to have exposure in the telecom space which is done well then for last two months or so we are building up some exposure in pharma which we will continue to do. Real estate exposure, we do not have we exited sometime back and we continue to hold that view. That’s broadly the strategy we are adopting currently.

Q: Last time we spoke you said there was some pressure in the industry that was facing some sort of redemption pressure not Kotak specifically. Has that pressure eased or is there still some money that’s looking to exit this market?

A: That pressure has eased largely or rather almost fully in fact on the contrary now we are seeing some signs of inflows. So that’s a very positive sign.

Q: You think domestic liquidity will continue in these markets or do you think that participation will continue to remain low on the volumes front?

A: If we don’t see further lows in the market I think domestic liquidity will continue.