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Chat Transcript
27 Aug 2012 - 16:00hrs hrs
Ambareesh Baliga | Market Analyst
What's the outlook for the market?
Chat Transcript
| Ambareesh Baliga: Hi Everybody... with the logjam in parliament policy decisions will take a back seat... scams will be discussion point again and political instability will raise it`s head... |
| mani5556: Sir,Please advise about nelcast and sona kayo for the short term? |
| Ambareesh Baliga: When the economy is going through a sluggish phase and auto industry is expected to show tepid numbers - it`s better to avoid auto ancillaries who are basically OEMs. First of all the demand sluggishness is not good news for them and secondly OEMs normally get squeezed on margins but play on volumes which is against them now. It`s better look at replacement market players like Exide and Ceat where the margins are better and the replacement market is expected to boom due to record sales in the last 4 years. Although both Nelcast and Sona Koyo are good companies but don`t buy at the current juncture. |
| mani5556: Sir, Is renuka a buy at present price or further downside remains? |
| Ambareesh Baliga: Among the Sugar stocks Renuka was one of the front runners in the earlier rally but with the monsoons playing traunt in Renuka`s geographical region and the balance sheet stress due to it`s overseas acquisition will weigh on the stock. I beleive sugar stocks overall would be under pressure inspite of higher sugar prices as unlike the earlier upswing - most of the sugar companies are not sitting on huge inventory - remember last time most of them had inventory gains and not a huge jump in margins!!! This time inventory gains are limited and with monsoons (except UP) will put pressure on the input costs - so not expect any fireworks. But if you still want to play the sector buy Balrampur on declines - 55/58 levels |
| laltu1959: Can better return be expected in Escorts? Many recommendations are seen in TV on this stock. |
| Ambareesh Baliga: Be careful about buying escorts now - Monsoon again will affect demand for farm equipments which is the mainstay for Escorts. |
| soumenkesh: Good Afternoon sir, i have Cairn india pantaloon and TCS can i hold them for 4-5 yrs? |
| Ambareesh Baliga: Cairn India I would have held for 5 years but not with the change of management we saw last year. Pantaloon is only a Retail FDI story which seems difficult now and whether it survives the next 5 years in the given format is a question as fund infusion is overdue for the group. TCS is the only stock (though I am cautious on IT currently) which I would possibly hold for 5 years. |
| santhoshpmg: Dear Baligaji, Still holding GMR. Seems like beaten up.Is it good to average at current levels for long term? |
| Ambareesh Baliga: GMR is still seeking lower levels thanks to the CAG report. Though one can find faults with the report about the valuation of land and benefits which GMR would have got - but one can`t deny the fact that it has affect the stock. What they have not realised is that the land can be used only for Airport related business and not to exploit commercially to build commercial complex and residential blocks. The last of the valuation of Rs. 100 crs/acre was got for a hotel project and as everyone will appreciate - you can`t build 50 hotels around the airport. So the valuation can`t be that high. Secondly the 5% land of 5100 acre airport was meant to be leased out but unfortunately due to the clause of Airport Use - I doubt whether they will find so many buyers for the balance 200 acres which is yet unsold. Don`t buy further unless there is clarity. |
| saurabh24061980: Sir which are good stocks to go long in futures September series |
| Ambareesh Baliga: Looking at the political situation don`t think of going long on the markets. |
| laltu1959: I am holding Adani Enterprise @226/- and Jain Irrigation @ 100/-. Should I exit both or hold? If to exit then which stock to buy to cover the loss? |
| Ambareesh Baliga: Jain Irrigation hold at current levels - may be buy more as below avg monsoon will kick start irrigation projects. Adani Enterprises - though too many negative stories - hold as it has already corrected sharply. |
| pmkcde: I purchased 500 Raj oil mills@52.50. Shall I retain or sell? |
| Ambareesh Baliga: No point selling Raj Oil @ 10/-. It was a good takeover candidate but the promoters seem to have allotted themselves warrants @ Rs. 11/- which will make takeover an impossible task. And it is clear that the promoters are not bothered about investors . This stock will languish - so hold for the next bull run to exit. It will certainly not go under - otherwise I would have told you to exit at current levels. |
| jha16june: Sir I have 5300 put option, should I wait till the expiry? |
| Ambareesh Baliga: Yes you should - looking at the weakness in the markets |
| prakash_544: sir plz tell me long term investment share |
| Ambareesh Baliga: Reliance Industries seems like a safe bet. I expect gas pricing post 2014 to be finalised. Logically Reliance has argued that unless the gas price is disclosed it would not be able to commit funds and unless funds are committed one can`t expect production ramp up to happen by 2014 - which means that India will continue facing gas defecit and the plants which have been put up based on Gas availability will continue to languish unutilised - this will further put pressure on the NPAs with banks and at the same time create energy issues for the country. So this decision can have a larger impact - Currently some of them are looking at using imported LNG costing around US$ 10. Instead if the govt increases the prices to close to that - one should be able to get abundant gas from KG6 - where I beleive price is a bigger issue than technical problems - otherwise someone like BP wouldn`t have invested. |
| santhoshpmg: Dear Baligaji, Can jain irrigation be a good buy for a 2 year perspective? |
| Ambareesh Baliga: Yes at current levels the downside is limited - looking at the state of the markets be prepared to see 67/68 levels but utilise that to buy more. |
| Ambareesh Baliga: Thanks everybody... hope to catch all of you soon. |
