Bullish on offshoring, cement: MAN Financial

Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See what other FIIs are saying about the markets See what other experts are saying about markets See what Udayan Mukherjee is saying about the markets Ambuja Cements BSE | NSE 31/05/12 Are Mutual Funds betting on Ambuja Cements? Other Stocks in this news ACC | Diamond Power Infrastructure | Emco | India Cements | Jindal Saw | Kalpataru Power Transmission | Madras Cements | Maharashtra Seamless | RPG Transmission |

Rahul Shah , Head-PCG at MAN Financial is bullish on offshoring like Great Offshore and  SEA Marine . He likes the pipe sector and is positive on Jindal Saw , Mah Seamless . He also likes ACC , Ambuja , India Cement and Madras Cement .

Man Financial has had a lower IT exposure post Q1, but they may review post ECB norms change.

Excerpts of CNBC-TV18's exclusive interview with Rahul Shah:

 

Q: What's your sense of how much down side there could be from here, given the volatility, and at what levels would you start buying?

 

A: Markets have corrected by 1,000-points from the top, that is from 15,800 all the way to 14,800 and right now it's up. On an over night basis or a intraday basis, it's an extremely difficult market to trade because it opens gap-up and gap-down and you might get caught on the wrong end.

 

So all in all, it's a difficult market to trade. However, we believe that this correction might continue for some more while, before we start accumulating the stocks.

 

Q: What levels would you be most comfortable buying stocks at and which sectors would you be focusing on?

 

A: We will be more comfortable between 14,000 to 14,400 levels to accumulate the stocks that we like. As far as the sectors are concerned, we are bullish on offshoring as a sector where we like Great Offshore in South East Asia marine as topics.

 

We like cement as sector where we believe that there is pricing power coming back in the off-take and although it's the monsoon season, it's up 15-20%.

 

We also like the seamless pipe sector where we like stocks like Jindal SAW and Maharashtra Seamless.

 

Q: What are your top two picks in cement and what kind of price targets do you have on them?

 

A: We would like to play ACC Ambuja in the largecaps and in the midcaps, we would like to bet on South based companies like India Cement and Madras Cement.

 

Q: What is the MAN Financial call on technology now and any one stock or two stocks that would pick out from the lot?

 

A: If you look at IT stocks, there are two concerns. One is the wage inflation and second is the currency risk. As far as the latest ECB norms are concerned we have seen 40 paise depreciation in the Rupee. If this continues for a while, we may see mitigation as long as the currency risk are concerned. However, if you look at the wage inflation that continues to be there, all in all we have a neutral rating on the IT stocks.  

 

Q: You also like some power and power ancillary, which ones are specific?

 

A: In power ancillary stocks, we like stocks like Emco Transformer , Diamond Cables , Kalpataru Powers and RPG Transmission .

 

Q: Any thing that you tactically reduced in your portfolio in the past two months given what you saw in Q1 earnings?

 

A: We have reduced exposure to the IT sectors after the Q1 results mainly driven by the currency risk. But we may review this after yesterday's developments.

 

Q: Have you begun coverage on anything in the real estate space and anything that you have a buy recommendation on?

 

A: We do not have any recommendation on the real estate sector.