Moneycontrol gets Sunil Jain, Head Equity Research (Retail) at Nirmal Bang to answers stock queries that investors asked on our Facebook page.
Oil shares stole the show on Friday, as the Sensex closed above the psychological 20,000-mark, up 75 points over the previous close and a weekly gain of 2 percent.
Buyers scrambled for shares of state-owned oil companies even as analysts were divided on the implications of Thursday’s Cabinet decision allowing oil companies to hike diesel prices in small measures. The Sensex closed at 20039.04, up 75.01 points and the Nifty at 6064.40, up 25.20 points.
But the big question on everyone’s mind is: how to trade market next week? Moneycontrol gets Sunil Jain, Head Equity Research (Retail) at Nirmal Bang to answers stock queries that investors asked on our Facebook page.
Below are his comments:
Mr. Jain: I feel Bajaj Auto can be purchased around 2020 for a target of 2125. And For L&T Sell at current price with Target of 1475 and Stop loss of 1570.
Pranav Behal: Which are the hottest stocks/sectors to buy till Budget?
Mr. Jain: For Rail Budget Titaghar Wagor which at very attractive valuation, Last year the budget was very bed for Railway related stocks but I feel Railway budget should have favorable announcement this time as such Titaghar Wagon can benefit from this. For Financial Budget I will prefer one of the infra stock ie. GVK Power. Govt will have to change the scene for infrastructure development and for that government will be coming up with some measures in coming budget.
Sandeep Bajaj: What is your call on HDIL? Can I hold it for the long-term?
Mr. Jain: I feel this is not the time to buy HDIL for long term when it has almost doubled in last 4 months. I feel one should wait and look for good correction before investing in HDIL for long term.
Amit Juneja: What about NHPC? What's your target for next 1-2 months?
Mr. Jain: I feel NHPC had a very good run in last 4 months and fundamentally I don’t see any great upside in the stock from current level. NHPC gets regulated return on equity on their investment and as such do not get any benefit of power price increase. NHPC project execution cycle is very long which block company’s capital as such ROE of the company is very low of around 8%.(less then bank interest) Stock is trading around 13 times FY14 EPS of Rs.2 which looks fully price.
Hiren Ahir: What is the future of GVK Power & Infra?
Mr. Jain: I feel GVK power can be purchased with 2 year view. The risk reward ratio at current point of time are quite favorable. I don’t see stock going below Rs.10 but can easily double from current level and may be more.
Rakesh Prajapat: I want to purchase Wipro at present rate Rs 405. Is it the right time or not?
Mr. Jain: No, December quarter result was below expectation and management has sounded cautious for fourth quarter. Even if we see the valuation of Wipro are costly as compared to HCL. I feel you can have a look at Infosys, HCL or TCS rather than Wipro.
Mr. Jain: Yes this is what the problem with many companies, the want to expand beyond their means and get trapped in to higher debt. We don’t know the outcome of their debt trap it can be much bigger dilution of equity or sell off of the business. And another important uncertainty is time, we don’t know how much time they will take to revive. I feel the best way is to keep these companies or radar and look for the event which can really turn around the company. Though you may have to buy such stock some time 20,30 40 % more but such stock when turn around can multiply. One of the stock in that is Vaibhav Global Ltd. Have a look at that.
Sriharsha Gundurao: How about JP Associates at Rs 92? Does it have potential to go up to 10% in a span of a week?
Mr. Jain: Though share has corrected 15% from its recent peak but up till now it has not give any sign of bottoming, reversal or consolidation. Batter to avoid it now and wait for reversal.
Mr. Jain: Yes all three looks very promising and safe investment for long term investment of 3-5 year. HDFC, HDFC Bank and Tata Global all the three have given over 30% CAGR return to investor in last 10 year and I feel the trend can continue. The most important feature in all these three company is great management which one of the key element to be looked into for long term investments.
Kaustav Dey: What about TCS? The stock has been in the same 1250-1370 range for quite some time now.
Mr. Jain: I feel Batter days are ahead TCS. Q3 was not so great but management sounded very positive for coming year. I feel you can buy TCS at current price and also add on decline with one year perspective.