Devang Mehta, Vice President & Head - Equity Sales, Anand Rathi Financial Services in an interview to CNBC-TV18 gave his reading and outlook for stocks across various sectors while answering investor queries.
Devang Mehta, Vice President & Head - Equity Sales, Anand Rathi Financial Services in an interview to CNBC-TV18 gave his reading and outlook for stocks across various sectors while answering investor queries. He tells investors whether they should buy, sell or hold these stocks in the short and long-term.
Below is the edited transcript of Mehta’s interview with CNBC-TV18. Also watch the accompanying video.
Caller: I have 50 shares of L&T at Rs 1480. The stock has seen a steep fall in the last 3 months on the chart. What should I do now?
A: We have seen a steep correction in L&T post results for two quarters which was quite robust. There were no execution concerns as such. But now the market has started factoring that the capex cycle will get delayed because of high inflation and interest rate scenario. People still believe more in the consumption story and they are not very bullish on the themes which are related to investment or capex.
It can be little bit weak from hereon. I foresee a 5-6% correction more for L&T. But I would ask the investor to book losses over here. He should hold this stock. In 2014-2015 when the capex cycle would start to show its results, that would have a double impact on L&T. We would see good prices for L&T over two-three year period.
Caller: I have 250 Sesa Goa shares purchased at Rs 230? What is your outlook on this stock?
A: No, we are not comfortable with this stock. This sector is not going to do well till the global turbulence last. Metal is anything that one should not be in at this point of time. Metal and mining will be facing a lot of pressure. Sesa Goa has a nag of getting into regulatory hurdles. There are lots of mining bans imposed.
The investor should very well come out of Sea Goa and be in some robust stock which can do well over a 1 or two year period. He can be in infrastructure which has seen a big valuation and price correction, something like JP Associates, which is a prime player in infra as well as in cement. He should be rather switching off his stock from Sesa Goa to JP Associates.
Caller: I own 100 Reliance Capital shares at Rs 390. What do you suggest?
A: The investor has to hold onto Reliance capital. Lot of negatives are now priced into this stock. The plans going forward could be quite robust. For Reliance Capital there are three things which have to be kept in mind.
First is the Nippon deal which has gone through very well. Secondly, Reliance Insurance would complete 10 years next year and insurance IPO could be very well on it’s way.
Also, Reliance Capital complies to lot of conditions for the new banking licenses so, it is probably a banking candidate as well. Though nothing can be said at this time surely, but a lot of negatives are factored in. He should do well if he holds onto the stock for the next one to one and half years.
Q: Coal India has been under slight bit of pressure in the last many trading sessions. Do you think it could get back to those glory days of Rs 400 and do you advise investors or traders to get into this stock at this level?
A: I surely Coal India is a buy at any sort of a dips or rather an accumulator. This is because we are a power deficient country. Coal india has a competitive advantage of pricing power which can't be compared to other company. On a market cap basis also the company is doing very well. Being included in Nifty and Sensex is a huge boost for Coal India. So somebody who has longer term horizon has to have his money in Coal India for one to one-and-half years.
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