Technicals expert Sudarshan Sukhani of s2analytics.com feels after swinging high in the first of the April series, the market will witness a downtrend towards the end of the series.
Fundamentals analyst SP Tulsian of sptulsian.com says that after upgrades on United Spirits after it received CCI and SEBI clearances for the open offer by Diageo, investors can gradually expect improvement in the operation of the company which could make the stock move up by 20 percent every year for at least three years or so.
Stock analyst Gautam Sinha Roy of Motilal Oswal Securities says that he continues to be more cautious on the defensive side. Clarifying that the time was propitious to accumulate private banks at current levels, he zeroes in on ICICI Bank.
Below is the edited transcript of the experts’ analyses on CNBC-TV18
The last session of fiscal 2013, which coincided with the expiry of March series, made a surprise U-turn towards the end of the truncated week. Extremely poor global cues had a cascading effect on the indices, which opened deep in the red and stayed in the negative territory for most part of the day. However, sentiment changed towards the last 20 minutes which helped Sensex close with over 131 points gain at 18835. The wide-based NSE closed up 40.95 points or 0.73% at 5682.
Sudarshan Sukhani of s2analytics.com throws light on the preliminary indicators for the April series. "The April series could be divided in two halves. In the first half, the market could bottom out in the short-term and swing towards 5,800 or even higher. In the second half, the uptrend will end and by the end of the series, a downtrend will resume."
SP Tulsian of sptulsian.com is positive on the April series without taking auto stocks into consideration "Auto stocks could remain subdued for a major part of the April series."
In the ADAG stable, Tulsian is positive on Reliance Capital and Reliance Infra as there is little downside in the stocks after beating handed to them by the market. "Overall, there is very little scope for downside in banking stocks."
The USFDA has lifted that import alert on Aurobindo's Hyderabad facility. "That’s very positive news," says Tulsian. "The removal of regulatory caution imposed by the USFDA for the last one year could cause the stock to rise 10-12 percent in the April series alone."
Tulsian dismisses the CLSA downgrade of Hindustan Unilever Limited (HUL) on grounds of accelerated disappointment in terms of discretionary spends and further downside. "I don't think much significance lies in this downgrade report on the stock, because it has not been underperforming."
Punj Lloyd's 27-percent rise could be due to some relief or extra compensation claimed in overseas contracts. "But that’s just a wild guess. I do not have any information to explain the steep upmove," Tulsian adds.
The market expert recommends a negative or short position on Hero Motocorp and Ashok Leyland. "I don't think Bajaj Auto will have problems due to its exposure to Sri Lanka market. So I am positive on the stock. However, the correction in Bajaj Auto looks unjustified. As TVS Motor is not in the F&O space, it will be difficult to take a short call on that stock. Otherwise, I am negative on that stock as well.”
ACC and Ambuja have disappointed with this series cement and analysts have started trimming their estimates for FY14 stating that the realisations are unlikely to keep up pace with the cost pressures on these companies. "The lull in the infrastructure sector and the threat of imports from Pakistan are not likely to last for long. The time is ripe for entry into these stocks. I expect better earnings for March April, May and June. So, I do not hold a circumspect view on the cement sector or these stocks."
On the upgrades on United Spirits after it received CCI and SEBI clearances for the open offer by Diageo, Tulsian adds that investors can gradually expect improvement in the operation of the company which could make the stock move up by 20 percent every year for at least three years or so.
Gautam Sinha Roy of Motilal Oswal Securities says that he continues to be more cautious on the defensive side. "From a long-term investment perspective, there is value in specific segments such as PSUs on the attractive offers-for-sale. But in the near-term investors with a lower horizon of a few months should continue to be cautious and stick to defensives such as IT and pharma," he told CNBC-TV18.
"Iron prices are key to the performance of the National Mineral Development Corporation (NMDC). In the attractive smaller private bank sector, IndusInd Bank stands out due to its growth potential," adds Gautam Sinha Roy.
In the past couple of weeks there has been a lot of pessimism and negative news flow for private banks especially the top three in the Nifty. While clarifying if the time was propitious to accumulate at current levels, Gautam Sinha Roy zeroes in on ICICI Bank. "The stock has corrected quite a bit and it is among the cheapest stocks in the private sector bank space."