Mkt may go up 8-10% post Budget, bet on Maruti, ICICI: Vora

"We are not looking at very deep corrections; we are looking at this phase of slight range bound movements with a slight downwards bias to continue," said Amisha Vora of Prabhudas Lilladher in an interview to CNBC-TV18.

She explains that the overall foreign institutional investors (FIIs) interest continues to be good in India while policy reforms are likely to trigger the market higher.

As an investment strategy, she is betting on Maruti Suzuki , DLF and ICICI Bank .

Below is a verbatim transcript of Amisha Vora's interview on CNBC-TV18

Q: How are you calling the run up to the Budget because it has been a disappointing run so far?

A: The overall foreign institutional investors (FIIs) interest continues to be good in India, there are two factors; one is the continuous flow of domestic redemptions as well as the primary market and second is the Chinese market. If you see year to date as well as month to date, Chinese market has been competing a lot with the Indian market performance. On policy front, we have promised a little more than we have delivered, so that is also a game of wait and watch.

We are not looking at very deep corrections at this phase of slight range bound movements with a slight downwards bias to continue. As the next session approaches for the Budget and we meet our fiscal deficit target, that would be the new trigger for the market.

Also Read: Dec industrial output likely to grow tepid at 1.1% MoM

Q: Do you see substantial upside post Budget for the market?

A: Very difficult to time whether immediately post Budget or beyond, but yes I do foresee another 8-10 percent upside for the year. Anywhere may be post monsoon or pre-monsoon as of now difficult to time, but I do foresee that kind of upside.

Q: In the broader market what are you putting forth as one of your top two-three buys after what you have seen in this earning season? What do you like going into the next couple of quarters?

A: On a macro basis, the whole year will play out gradually, may be the interest rate story as well as globally the yen story. On a micro basis the product mix profile and the increasing capacity, we like Maruti Suzuki as one of our top pick. Of course the stock has done reasonably well and will continue to do well in the next 12-18 months as well.
 
The other thing which is gradually turning around and may look good and has come in our buying list after a very long time in last 1-1.5 months has been DLF. Post cutting off some of their non-core assets and trying to reduce debt, the next four-six quarters and more could be drastically different from last four-six quarters and there is still some steam left in this stock to give returns.

Third one is from the financial pack where ICICI Bank continues to look good. These are the three large cap names that I am suggesting and are amongst our top three picks.

Q: What is your top pick from infrastructure or capital goods right now?

A: Though the interest rates will benefit the infrastructure stocks the most and in terms of unfinished agenda of government, it is also the debottlenecking of current infrastructure projects and having economy to feel its multiplier impact would be the biggest priority for government.

In the first phase, we would like to ride it through Larsen and Toubro ( L&T ) on investment basis. Of course, on trading basis one can look at stocks like IVRCL with all the controversies that it may still have, there are sufficient assets which on selling can reduce their debt. These are the two stocks within this spectrum and everything in between, we still think that they will use every occasion for dilution to reduce the debt and that will not be anything greatly accretive for investors in secondary market.