Shares in Infosys closed up 16.8 percent on Friday as it surprised the street with an unexpected rise in its fiscal year revenue estimate and stellar third-quarter results.
Infosys' 16.8 percent jump on the BSE almost single-handedly kept the Sensex in the black, with 26 of its 30 components closing lower, including index heavyweights Reliance Industries and tobacco major ITC .
So, is it time to shift out of TCS and bet on Infosys? Ambareesh Baliga, Independent Analyst is not ready to move out of TCS yet. In an interview to CNBC-TV18, he said "I will not shift from TCS to Infosys at this point of time since it has already moved up so much. I don’t see much more upside from here. I would wait for one more quarter results to see whether it continues or not."
Here is an edited transcript of his interview.
Q: After many weeks of a good run, this week our market sold off by about a percent or so. Is this just routine profit taking in your mind or would you be genuinely worried about the uptrend getting arrested?
A: I would say bit worried now. Last couple of weeks although we are consolidating and correcting a bit, but the move which we saw today there was a tinge of weakness in the market. If it was not for Infosys results we would have broken important levels. Its time to just wait and watch and see what the market does going ahead in the next two or three days.
Q: Wanted your thoughts on both Infosys and TCS? Now a couple of brokerages like CLSA are advising a shift out of TCS into Infosys which is something that we haven’t seen for a really long time in terms of recommendation. How would you approach both these stocks?
A: Infosys stumped most of us who were negative on the stock for a while. Right now with the sort of the move which we have seen, 17 percent move, I will not shift from TCS to Infosys at this point of time since it has already moved up so much. I don’t see much more upside from here. I would wait for one more quarter results to see whether it continues or not.
Q: Wanted to check with you on the oil and gas space because we have seen this play out many times in the past where there is an impending diesel price hike that the market is expecting and on the back of that you see a lot of oil and gas stocks move. How would you approach the sector now and within this pocket is there any stock that you would advice a buy on?
A: Already we have seen most of them moving up and also correcting from those higher levels. I really don’t see much of a movement unless until we have that announcement of Rs 3.5-4. It is possible that we could again see these stocks moving another 3-4 percent from here, but nothing much. One stock which I would like to buy from the next six to eight months angle is Indraprastha Gas Limited (IGL). Compressed Natural Gas (CNG) vehicles have been growing at about 30-35 percent over the last five years and is expected to grow at similar rate.
This company has had regulatory issues in the past that is the reason this stock fell from Rs 350 to about Rs 220 from where we have seen a bounce back to about Rs 250. I see levels of about Rs 280-290 in the next four to five months. I am looking at earnings per share (EPS) of about Rs 30 for FY14 and Rs 36 for FY15, from that point of view level of Rs 280-290 is achievable in the next four to five months. If you are talking of next one and a half years I see levels of about Rs 340-350.