See scope for upward re-rating in Infy, TCS: Aberdeen AMC

Here is a verbatim transcript of the exclusive interview with Adrian Lim on CNBC-TV18. Also watch the accompanying video.

Q: There is a sense of hope in the air that global markets are on the rebound. Would you concur?

A: I think in the capital markets the signals are pretty clear. There seems to be a lot more liquidity in the system and there have been quite a few very prompt placements for cash as well at the capital market - not only in India but in China as well as the Western hemisphere. So this liquidity has helped sentiment and it's making the market look relatively good.

Q: Do you find valuations extended or do you think earnings have trough out globally and locally in India and the market is basically being accurate in pricing it in? 

A: I think valuations have had very good run and the chances are that if we look back six months time and we would have spotted some extension at this period of time. I think when you look at the results that have come out; Indian results are far superior than what you get in the region though. You are looking at some pressure at the sales level, looking at the June quarter numbers across many sectors but by and large most businesses in India have been able to keep their margins quite strong. So among the key players the larger players within each of the sectors, we have seen some decent results coming out from HDFC, from Infosys, I think each of the sector leaders continue to manage their cost structures well professionally and that has caused strong quality gains at the earnings or the net earnings levels. We are pretty hopeful for Indian results and prospects going forward.   

Q: There has been great deal of surprise on the performance from sectors like cement, anything that you track there. What did you make of the performance? 

A: It's impossible to predict where the share prices would go from here. We take a very balance approach, I think, some of the key cement stocks have run-up quite well and in environment like this one, you do need to be very focus, you do need to be very long-term driven arguably across many sectors, you are seeing slightly extensions at valuations, would you make money of the next three weeks that's difficult to call but given the strength of the earnings, the strength of the guidance, you should be able to make decent money of the next three years.

Q: Do you think sectors like auto have bottomed out because we have seen big rallies in stocks like Maruti, Hero Honda even Tata Motors in our market here? Do you think the sector which went through such a lot of pain in the last 1.5 years has turned the corner? 

A: I think it's very difficult to say. Two-wheelers for e.g. like Hero Honda haven't had the curb on their numbers; volumes continue to be quite strong over the last three-four quarters, so I think Hero Honda has not seem the four-wheeler slowdown that we have seen, experienced over the last two years or so. I think the capital markets are slightly ahead of themselves in the auto segment. I think you do need to be very selective but it's not just in the auto stocks for e.g. you do need to pay attention to the strong brands, strong companies and even if they are slightly extended on valuations, you should do fine over the long-term.       

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