Expect diesel, LPG price hike; negative on Crompton: Vijay

On the back drop Presidential election where Congress candidate Pranab Mukherjee winning the poll, UPA will be enthuse to take some bold decision like diesel and LPG price hike, as the finances of most of the state like UP, West Bengal etc are in shambles.

Below is the edited transcript of his interview to CNBC-TV18.

Q: What is your view on Crompton Greaves and how would you approach the stock?

A: The disappointment is all around the stock. The company has done some aggressive things in the past which have not paid off. Though the management and business is good, but they have too many headwinds going in Crompton. Though the stock has fallen I will not buy this stock at at this level.

Q: With Presidential election gone by. What are your expectations from New Delhi at the moment? Do you expect some policy action to start from this week or do you think that ally trouble will come in way of policy action and spoil the mood of the market?

A: With gloom and doom globally, I expect something in the local market. UPA Presidential candidate winning the poll by handsome margin will make UPA feel more comfortable. On the back drop of that, UPA will be enthuse to take some bold decision like diesel and LPG price hike, as the finances of most of the state like UP, West Bengal are in shambles.

We should expect some thing because there is so much of gloom and doom globally, the one positive is that Pranab Mukherjee won by a very handsome margin and there was a lot of cross voting in Karnataka and Andhra voted amass for Pranab Mukherjee which means that the Jagan crowd is probably veering back on some deal with the Congress. So UPA should be feeling a bit more comfortable after the steam roller win that their candidate had in the presidential election and they would be averse to doing anything more than posturing if there is a pretty strong rise in diesel and LPG prices. So that is doable and the market would like it. I expect the hike to happen in this week.

Rangarajan also said that there is a possibility of S&P downgrade if we don’t go for the hike.

On the FDI, the stack has changed slightly. Last week the government said that they will not put FDI on the automatic list but put it through the FIPB route, which means that Wall-Mart would apply for a license to do business in Maharashtra and the Maharashtra government if it support, it goes through. Mamata Bannerjee cannot say I refuse to have Wall-Mart in Mumbai that will be against the Federal Manta that she talks about. So some tactical posturing may be done but I hope that the diesel and LPG hike will come through over the next five working days.